In Philadelphia, the head of a payday lending enterprise was accused because his company issued a loan with more than 700 percent of interest rate. This is unacceptable; however the defender of the accused side stated that his ward did not break the law.
Charles M. Hallinan is 76 years old; he is accused of collusion and evasion from state regulation in the sphere of issuing loans. His company issued a loan at an excessively wrong and huge interest rate. The federal charge says that the Hallinan company hunts potential customers, who pay huge interest rates and then drown in debt. The company received almost 700 million dollars of profit in the period from 2008 to 2013.
There were many partner enterprises that were used as cover in this company. It is used to receive a legal profit from the interest rates people pay for using the loan. But the interest rate of 700 percent per year has no state approval. Hallinan concluded deals with the local bank and American tribes; part of the profit comes from these two sources.
His attorney Edwin Jacobs insists on a thorough investigation. He said that the company receives its profit in a legal way, and the high interest rate is the amount for an annual overpayment. It is believed that the Federal Deposit Insurance Corporation is aware of all the activities of this company; which means that activities are carried out within the frame of the law.
Edwin Jacobs said that the company is not a thug or a criminal; they work and abide by the current legislation. Their credit system is not fraud; it is a special system of interest rate calculations.
Charges were not only for the head of this company but also for his former lawyer Wheeler K. Neff. He is accused of concealing the company’s activities from the law, but according to him, the company was working legally and did not break the law. Now the court will check the lawyer and his former attempts to protect the activities of the Hallinan company.
Attorney Dennis Cogan said that the reason might be in a special business model that helped the company to make a big profit and to have legitimate arguments for legislation.
The prosecutor reviewed the documents of the company and stated that Hallinan had found good loopholes in the laws and the company was working according to these points. If the activities of the legislation are considered, then everything was in the frame of the law.
The final decision of the court is not known yet, but if the head of the company is being charged, he will lose his freedom for 12 years. His lawyer will be given eight years. But this data is from a press release, the exact information will be announced when the judicial authorities conduct an in-depth investigation.