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State revokes licenses
Payday Loan stores: Former employee filed complaints

By Andre Salles
Staff Writer

A state agency has revoked licenses for four Fox Valley lending facilities owned by the Payday Loan Store of Illinois Inc., charging that they forged documents, took invalid Social Security numbers and failed to give the proper information to applicants.

However, the four stores — three in Aurora and one in Plano — continue to operate, and, according to Payday Loan Store owner Bob Wolfberg, the matter might be headed to court.

The allegations came this week from Gov. Rod Blagojevich's office and the state's Department of Financial and Professional Regulation. That agency is authorized within the state to license, regulate and investigate financial institutions, such as credit unions, title insurance companies and businesses that loan less than $40,000.

According to Dean Martinez, head of the department, the agency conducted an investigation after receiving complaints from a former Payday Loan employee regarding four locations — 1261 N. Lake St., 902A N. Lake St. and 954B E. New York St., all in Aurora, and 129 E. South St. in Plano.

The investigation turned up enough evidence, Martinez said, to revoke the licenses, and the Department of Financial and Professional Regulation is engaged in a wider investigation of Payday's 40-plus stores across Illinois.

Wolfberg, who also is president of the Illinois Small Loan Association, denied the allegations and said that Payday Loan would challenge the revocation. According to Wolfberg, the company conducts its own monthly audits, and never has turned up evidence to support the state's allegations.

"We're going to court, and we expect to win," he said.



Anti-immigrant claim


Wolfberg went even further, alleging that the state is targeting the Mexican immigrant population of Illinois — and of Aurora in particular.
He said that, in the cases under review, the applicants used the controversial Matricula Consular card, given by the government of Mexico through its consulate offices as identification.

He charged that the state chose Aurora for its investigation because of the city's high Mexican population.

"I wonder if this is part of a concerted effort by the IDFPR and Gov. Blagojevich to deny credit to Mexican immigrants with federally recognized forms of ID," Wolfberg said, "or maybe the state government is merely ignorant of the needs and lifestyles of Mexican immigrants."

Martinez, who is first generation Cuban-American, adamantly denied those charges, noting that his agency responded to a complaint and did not select a target.

"An individual made allegations regarding — frankly — egregious acts in these four specific stores," he said. "There is no target area."



Documents of the dead


Among the charges, Martinez said, are two involving invalid Social Security numbers. In one case, the state alleges that Payday knowingly accepted a loan application containing the Social Security number of a deceased person.
"I can't get into specifics, but the allegation is that they gave a loan knowing that the Social Security number was false," he said.

Wolfberg said that Payday checks Social Security numbers, but their system is not foolproof. According to Daniel Dorame, director of operations for the company, Payday stores use the Teletrack system to run their checks, and if the database turns up nothing, the stores accept pay stubs and bank statements with Social Security numbers on them as a backup.

"The charges involve invalid Social Security numbers. And who doesn't have a valid Social Security number? Immigrants," he said. "If they give us a pay stub with a Social Security number on it, then their employer believes that's who they are, and so do we."

Wolfberg also noted that under state law, Social Security number checks are not required for loans that last longer than 120 days, and Payday does them voluntarily as a matter of internal record keeping.

Wolfberg is mystified by the charges, which he said he learned of through the state's press release on the weekend. He said that no more than two weeks ago, the Department of Financial and Professional Regulation's Division of Financial Institutions conducted an audit of his Aurora stores and turned up nothing.

Martinez could not confirm that, but said that Wolfberg might be mistakenly referring to the same investigation, conducted weeks ago, the results of which are being released only now.

Wolfberg said that the stores would continue to operate, and he believes the law will be on his side.

"We've reviewed the law, and we feel that we have a good case," he said. "The department is acting recklessly."