CMA Community

1. Dina Amadril
   Member

   Reputation:22

    

   From a CMA member:

   We charge finance charges (interest) on past due balances/accounts. Since we charge an (interest) penalty, do we need to get a California finance lenders license?

   Posted 2 years ago #

2. Christine
   Member

   Reputation:122

    

   Here's some information...

   http://www.corp.ca.gov/FSD/lender.asp

   Posted 2 years ago #

3. DMarc CBA
   Member

   Reputation:78

    

   Although some rogue judge could always make the scope broader than intended... this appears to apply primarily to those in the business of loaning money such as a bank or financial institution, payday loan type industry. Did the customer fill out paperwork applying for a specific loan?

   Posted 2 years ago #

4. F Scott Wilson
   Member

   Reputation:267

    

   In my experience, finance charges and late fees are *not* considered interest, as such, due to the fact that interest is the cost for borrowing money, while late fees and the like are for late payments on goods or services. I don't like to refer to late fees or finance charges as interest, because that implies the right to get payment of interest from my employer, in the case of, for instance, a credit balance or overpayment.

   Dina, I would suggest that the finance charges for past due balances be referred to as anything *but* interest, in order to avoid muddying the waters.

   Posted 2 years ago #

5. Michael Dennis
   Member

   Reputation:173

    

   I agree with Scott. If these fees are referred to as penalties for late payment rather than interest charges, it will make the creditor's intentions clearer and - in my opinion - will reduce the risk of some form of legal action substantially.

   I hope this helps.

   Michael Dennis

   Posted 2 years ago #

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