HARRISBURG, Pa. (7/30/08)--Internet payday lenders and other out-of-state companies that make consumer loans to Pennsylvania residents will need to be licensed by the state department of banking and comply with state laws, Pennsylvania Secretary of Banking Steve Kaplan announced Monday. He also cited the Pennsylvania Credit Union Association’s Credit Union Better Choice program as an example of loans offered by credit unions that cost less and can be paid back over longer periods of time than traditional payday loans (Life is a Highway July 29). The announcement is the most recent action by the department of banking to protect Pennsylvania consumers from excesses associated with payday lending. The department says the Consumer Discount Company Act (CDCA) applies to any company that lends to Pennsylvania consumers. The CDCA limits the interest and fees a non-bank company can charge for non-mortgage loans of $25,000 or less. If companies do not obtain a license from the department by Feb. 1, they face possible fines and other penalties. The department previously had interpreted the state’s CDCA to apply only to companies with a physical location or employees in Pennsylvania. As a result, companies in other states made loans to Pennsylvania consumers through the Internet or mail under terms that did not comply with Pennsylvania law.