Pioneering Payday Lender Facing Legal Charges

A lot of people have tried their hand at the payday lending industry over the years, but few can boast of having nearly 20 years under their belts, like Chris Hallinan has. He managed to get rich over the years, ran a tight ship and did it all by providing one short term loan at a time. But now, U.S. prosecutors are getting a case ready to take against this payday lending pioneer. They are collecting evidence on a racketeering case that they think is a sure thing. They intend to prove that Hallinan conspired to evade usury laws, and they say that they have multiple witnesses that can verify these charges. One of the folks the prosecutors plans on calling on is a former partner who is facing a pretty stiff prison sentence, after being found guilty on racketeering charges.

Hallinan is now 75 years old and lives in Philadelphia. He was one of the first in business to offer payday loans via the phone back in the 90s. This business model gave him reign to operate businesses in states that have done their best to extinguish payday advance cash loans. He was the person who came up with the concepts of using the “rent-a-bank” and “rent-a-tribe” methods of operation to avoid the wrath of state regulators. These days, a lot of the payday lending industry has moved online and experts estimate that these lenders make about $16 billion in short term loans annually.

State regulators try very diligently to stop online lending companies, and now federal prosecutors are using racketeering laws that they once used to stop the Mafia. A Pennsylvania grand jury started investigating Hallinan over a year ago. Adrian Rubin is his former business partner and was charged with racketeering conspiracy back in June of 2015. According to Zane Memeger, Philadelphia U.S. Attorney, “Rubin conspired with other people to evade state usury laws and other restrictions on payday loans by engaging in a series of deceptive business practices. Rubin and his co-conspirators reaped tens of millions of dollars.”

In Rubin’s case, there was a party described as ‘Co-Conspirator Number 1.’ According to two of the people the prosecutor is calling upon, this is a direct reference to Hallinan. As of right now, Hallinan has declined to offer a comment. His lawyer, Michael Rosensaft also declined to offer further information. Rubin did not directly address the court when he entered his guilty plea. His sentencing is scheduled for October 28th.

Hallinan got his start in the payday lending industry a few decades ago after he sold a landfill company for nearly $120 million. He was formerly an investment banker and graduated from the Wharton School at the University of Pennsylvania. Currently, he owns a residence in Villanova and a condominium in Boca Rotan.

People have been relying on different types of short term loans, long before folks like Hallinan got started in the industry. These days payday lending locations are very common in the states where this type of lending is legal. President Obama has made no secret of his dislike for this industry, and has given more than a few government agencies marching orders to regulate the industry to the point of possible extinction. With Hallinan being a prime example of how much of a success a payday lender can become, it is no wonder that the government has targeted him for legal action. Anyone interested in the short term lending industry, or followers of how the government is cracking down on prominent names in the payday lending world will surely be watching to see how this high profile case pans out.