“Predator puppy loans” are exploiting New Jersey consumers

If expensive financing is given to buy living beings, advocates across the country say something needs to be done.

To circumvent state law in New Jersey and elsewhere, groups say, a lender is using a Utah-based bank to make “predatory” loans to people who want to buy puppies from the store.

The Garden State has a standard interest rate cap on consumer loans of 30%, but through lender EasyPay Finance, the pet loans can be granted with effective interest rates ranging from 130% to 189%, according to a campaign by consumer and animal welfare advocates in February.

By working with a bank, in this case Transportation Alliance Bank, EasyPay can circumvent state interest rate laws, the groups noted.

Documentary sent to New Jersey 101.5 shows a 2019 financing receipt from a Union pet store directing the consumer to repay more than $7,500 over 2 years on a $2,500 loan.

“The practice of Rent-a-Bank takes place here in New Jersey and we are deeply concerned about it,” said Beverly Brown Ruggia, financial justice program director at New Jersey Citizen Action.

The campaign calls on TAB to stop helping EasyPay “exploit our most vulnerable residents in the state and the animals used to lure those residents into debt traps.” The groups are also calling on the FDIC, which oversees financial institutions, to block TAB from “facilitating this circumvention of New Jersey law.”

Lenders like EasyPay offer financing at places like pet stores, auto repair shops, and furniture stores. EasyPay processes loans through TAB in 32 states where the interest rates are illegal and directly to consumers in states that interest groups say allow high interest rates.

“Few rogue banks are willing to stand up for predators lenders,” the National Consumer Law Center said in a press release.

When a company representing TAB was asked for comment, New Jersey 101.5 referred to a blog entry about the services of TAB. In it, the bank noted that traditional loans may not be an option for a number of US citizens.

“An unsecured and short-term loan could serve as a vital lifeline for a family or an individual in crisis,” the post reads. “For these reasons, TAB Bank offers these people a much better alternative than a payday loan to build a viable bridge to a better financial future.”

EasyPay could not be reached for comment.

Brown Ruggia added that prospective buyers can also help curtail the practices of certain lenders.

“I think the important message here is that consumers really need to take a moment, step away from the register and make sure they understand the terms they’re signing up for, for any type of finance,” she said.

Dino Flammia is a reporter for New Jersey 101.5. You can reach him at [email protected]

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