Our Hot Check office is taking a look at what other counties do when a check from a "payday loan" transaction is submitted to them for prosecution. We can't charge with regular Theft by Check because the presumption of intent under TPC 31.06 doesn't apply to postdated checks (and all payday loans work by the creditor lending money in exchange for a postdated check for a week or two later). We've looked at the Hot Check statute, TPC 32.41 - Issuance of a Bad Check, and there the only requirement seems to be that the person wrote the check with knowledge that they didn't have enough money in their checking acount at the time.
1. Do your offices even pursue prosecution of these types of checks?
2. Do you see any problems with charging someone under 32.41?
3. Does the fact that the creditor has a good idea this person doesn't have the $ in their account when they recieve the check affect prosecution under 32.41 in any way?
4. Does a defendant's bancruptcy status affect how we can prosecute hot checks?
Thanks for any guidance you can provide. I'm fairly new to this stuff and any help is greatly appreciated.
32.41(b) also has the postdated checks exception. You'd have to prove that not only did the defendant know he didn't have the funds at the time he wrote the check, he knew he wouldn't have the funds at the time the check would be cashed. That intent's going to be pretty hard to prove. Pretty much everyone writing a payday loan check is doing it knowing they don't have the funds, and all of them will say they expected to get money for doing XYZ before the postdate date.
In response to number 3 of your query; Have you seen the agreement they make them sign? The one I have seen makes reference to 32.41 and getting the law after you if your check is no good on payday. Oh, I am pretty sure they know that check is no good when it is written. Why else would the borrower be seeking a "payday" loan. I like John B., feel that the Legislature did not intend for the Penal Code to affect the borrower on these personal loan. I am sorry, just venting. The proper responses have been expressed by Andrea and John B. For the record, I do not prosecute post-dated checks nor do I accept checks from the payday loan places.
Aren't the loan sharks, excuse me, Payday Loan Industry Executives, charging that high interest on the gamble that they won't get paid by a certain percentage of folks? That is a business decision on their part. I'd be hesitant to take that on. Juries aren't likely to be very sympathetic to your victim and a decent attorney will get some low wage blue collar workers in the box.
So unless you have some guy out there getting loans as part of some scheme, I'd shy away.
So, TCTAnCo, what did ya'll decide to do? The reason I ask is because I just had some of those folks in my office asking me to take their checks. They told me that some other offices in the area take their checks. They even insinuated that all I really needed to do was send the demand letter and would not have to file formal charges because some other jurisdiction did it that way. I promptly informed them that my office does not threaten criminal prosecution when there is a question as to whether or not a crime has been committed. Especially to collect a debt. Anyway, I was just curious as to what ya'll had decided.
We decided that we couldn't prosecute on these checks, so we wouldn't collect on them. We're sending the checks back to the lenders to let them pursue collections on their own.
I surveyed the surrounding counties regarding their policies, and none of them prosecuted on the checks. A few still collected on them, but most of those were trying to get out of that practice over time. So I guess there are a few counties out there that do collect, but the majority (and all of the larger counties) that I talked to do not take these checks at all.
In the process of looking at these payday lenders, we discovered that there were actually many more lenders in town than we thought, but most of them never brought us their checks in the first place. They used private collection agencies and had always done so. I suspect that the lenders who used to bring us their checks will go the same route.
So overall, we made the same decision you did. Thanks again to everyone who posted on this; your comments were very helpful.