Our Management is thinking about starting a program only for employees that will offer pay day loans for their checks. What would be required for language on the applications. Should these just be treated as a customer and would we run across any compliance issues just doing this for our employees? Any other areas of concerns I should worry about? We don't currently have pay day loans so I am new to this. Any help would be much appreciated. Thanks!!!

Just because they are an employee does not get you out of the regulation requirements. On the surface, this does not sound like a good idea. Payday lending is under intense pressure from CFPB and now you want to get into the program for employees.

I agree with you but management is using the tone that it is going to be a benefit to employees where they won't have to go to a pay day lender. We are not going to advance any money or take collateral. If the employee does not pay us we are going to eat the costs. Thanks for the feedback

Not going to advance any money? Isn't that the whole point of 'lender'?

I don't get it.

This sounds like a very poorly thought out plan.

When you say we are going to eat the costs, what does that mean?

If the employee does not pay, will there be other repercussions?

Perhaps the whole discussion is a sign that management should be reviewing its compensation of employees?

This sounds like an payday advance service that allows overdrafts under some form of control, and repays the advances from subsequent deposits of payroll proceeds. I think it's an invitation to disaster.

I would agree totally.