Pennsylvania's Consumer Discount Company Act and who holds a CDCA license
Pennsylvania regulates small-dollar consumer credit through the Consumer Discount Company Act (CDCA), administered by the Department of Banking and Securities (DoBS). Under 7 P.S. § 6203.A, a company in the business of negotiating or making loans or advances of money on credit of $25,000 or less must hold a license from the Secretary of Banking before it may charge more than a lender could otherwise lawfully charge. Licensees may lend at annual rates up to 24%, while an unlicensed party that holds itself out as arranging such loans for a fee is held to the 6% general usury ceiling of the Loan Interest and Protection Law.
A license held mostly by out-of-state companies
The Commonwealth's open-data register of non-depository licensees lists roughly 300 principal consumer discount company licenses, and fewer than one in ten of them are headquartered in Pennsylvania. Texas addresses account for about a third of principal licensees, followed by California and New York. That pattern follows from the Department's position that internet and mail lending to Pennsylvania residents is lending "in this Commonwealth", which the Pennsylvania Supreme Court considered in Cash America Net of Nevada v. Department of Banking (2010). National online lenders, credit-card and installment fintechs and auto finance companies therefore appear alongside traditional storefront finance companies.
Trusts, receivables vehicles and debt buyers
A distinctive feature of the Pennsylvania register is how many licensees are not operating lenders at all. Around a quarter of principal licensees carry "Trust" in their name, many of them dated auto-loan securitization trusts (for example "Auto Owner Trust 2022-2"), and dozens more are "Funding" or "Receivables" vehicles that hold purchased consumer loans. In Petro v. Lundquist Consulting (3d Cir. 2024) the court agreed with DoBS that the CDCA regulates consumer credit rather than the collection of consumer debt, so a passive debt purchaser is not covered by the Act's negotiating-or-making test; many holders nevertheless keep a license, which makes the register a practical map of who owns Pennsylvania consumer loan paper.
Branches and annual renewal
Each office from which a licensee conducts CDCA business is licensed separately, and the register carries about 200 "Consumer Discount Company Branch" records next to the principal licenses, keyed to the principal license number. License fees are paid annually on or before June 1. Mortgage lending, mortgage servicing, sales finance, money transmission and check cashing are separate DoBS license types under other statutes, so a company may appear several times across Pennsylvania's non-depository register.
How buyers use it
- Bank and fintech partnerships: confirm a counterparty is licensed before relying on it to originate or hold Pennsylvania loans under $25,000.
- Loan sales and securitization: identify licensed purchasers and trusts that can hold Pennsylvania consumer receivables.
- Compliance and competitive research: track which national lenders have entered Pennsylvania and where licensees are based.