In 2001, the Florida Legislature was faced with mounting calls to regulate short-term, high cost consumer lending, commonly referred to as “payday lending.”
At the time, Florida consumers were caught in a dangerous situation; while consumer lending on a national scale had general regulatory oversight from the Federal Trade Commission and other federal agencies, gaps in the regulation of these entities at the state level made it possible for consumer to take out multiple short-term loans from various lenders at the same time. Many consumers found themselves with thousands of dollars in loans from several different lenders, all with the same due date. Loan extensions were available, but came with staggering fees. Additionally, states like Florida did not have specific statutes dealing with short term lending.
The Florida Legislature passed Senate Bill 561 in 2001 to establish a unique statutory code to regulate short-term, high cost consumer lending by limiting consumers to a single outstanding loan statewide; the law also prevents a lender from extending any loan for an additional fee. Florida needed a complex, real-time database management solution. Veritec stepped in to provide it.