Posted: Jul 14, 2014 6:47 AM by Chris Nakamoto
Updated: Jul 14, 2014 9:19 AM
BATON ROUGE- A scathing audit released this morning by the State Legislative Auditor's Office found major compliance problems with the state agency charged with making sure banks and lenders follow the law.
What does this mean for you? If you received a payday loan over the past three years, you could be eligible for a refund.
The State Office of Financial Institutions (OFI) is supposed to regulate all state licensed financial institutions, which includes lenders, banks and credit unions. An audit found a lack of oversight for payday lenders in the state.
If you take a drive around Baton Rouge, you'll find payday lenders everywhere. Need cash fast and cash for you are some of the catchy phrases that might get you to stop in and pick up some fast cash. A payday loan gives you a short term loan to cover your expenses until your next payday. It's a big business.
An audit conducted by the State Legislative Auditor's Office found payday lenders have been able to operate with very little oversight. The agency charged with keeping them in line had hardly any procedures in place to make sure the businesses were following the law, according to the audit.
From January 2010 until June of 2013 the audit found the following major problems.
-There were 8,382 violations where a borrower got overcharged.
-The Office of Financial Institutions (OFI) did not follow up on 82 percent of the violations that required a refund to the borrower.
-As a result, there's no proof of whether these companies issued a refund.
-The state did not look into half of the complaints filed.
So what does it mean for you? It means you might be owed money.
The Office of Financial Institutions issued a response to the audit and said, each of the recommendations contained in the audit will be addressed.
The Commissioner of OFI, John Ducrest says procedures will be revised to implement those recommendations.
The audit also noted that there were no processes in place for OFI to address complaints it received. Stay with WBRZ for more on this story throughout the day.