Consumer Alert: Rochester-area businesses offering high-interest lending. Is your lending rate 189 percent?


ROCHESTER, NY This Consumer Alert raises a serious issue that we want you to think about.

Would you ever take out a loan if you knew the interest rate was 189 percent? For most of us, the answer is a resounding no. But I have learned that such loans are offered here in Rochester. You may think it’s illegal.

Finally, New York is a state that has a number of consumer protection laws on the books. And loans are no exception. New York limits the interest rate on small consumer loans to 25 percent. So companies do what consumer advocates call Rent-a-Bank loans, with interest rates of up to 189 percent.

That National Center for Consumer Law is one of many consumer groups calling Rent-a-Bank loans predatory. It was one of the consumer protection organizations that recently sent letters to companies across the country urging them to “stop offering credit through predatory lenders Easypay Finance and Transportation Alliance Bank (TAB Bank).”

Easypay Finance routes its lending through a non-state bank called Transportation Alliance Bank (TAB) out of Utah, which is not subject to our state’s credit limits. She then offers her financing services to car repair shops in our area. But consumer advocates argue that these loans, with interest rates of up to 189 percent, are often exorbitant.

Let’s say you keep driving and your car stops. You learn you’ve blown a head gasket, a repair that will cost $2,000. You pay $500 and the auto repair shop offers you a loan for the remaining $1500 to be paid over 12 months.

However, the Consumer Law Center argues that Easypay does not disclose that the loan bears an interest rate of 189 percent. At that rate, your loan payments will be approximately $293. By the time you paid off that repair, you paid $2,016 in interest. And the total cost would be about $3,516, more than double the original loan amount.

While businesses across the country received the letters months ago, the loans are still being used by thousands of businesses, including auto repair shops in the Rochester area, according to Easypay’s website. The site features 34 auto repair shops in our area that use Easypay financing. All are under the Monro Inc. Roof: Monro Auto Service, Mister Tire and Tire Choice Auto Service.

I have reached out to both Monro Inc. executives and Easypay. No one from Monro has responded to calls or emails, but executives with Easypay got back to me quickly. A spokesman denies claims that their lending practices are predatory, and they say that’s often the only option available to many.

“Many Americans are left behind by the traditional banking and credit system. EasyPay facilitates financing options to ensure these consumers have a trusted and secure choice to access otherwise unavailable credit for urgent needs and discretionary purposes. Through a transparent process, we offer a range of loan levels based on a borrower’s credit profile, with an interest rebate program designed to encourage repayment. Our products are offered to eligible consumers in accordance with applicable federal and state laws.” – EasyPay Finance

While consumer advocates say Rent-a-Bank loans are more consumer-friendly than payday loans, they insist there are better options for those with no or bad credit. CNBC, bank rateand nerd wallet all have a number of suggestions.


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