Predatory Payday Loan Prohibition Act of 2005 - Amends the Truth in Lending Act to prohibit a creditor from making a payday loan to any person if the creditor knows, or has reasonable cause to believe, that: (1) the personal check or share draft received in exchange for the loan is drawn on an insured depository institution or an insured credit union; or (2) the account that will be debited in exchange for the loan is a transaction or share draft account at an insured depository institution or an insured credit union.
Defines payday loan as any transaction in which a short-term cash advance is made to a consumer in exchange for: (1) the consumer's personal check or share draft in the amount of the advance plus a fee, where presentment or negotiation of the check or draft is deferred by agreement of the parties until a designated future date; or (2) the consumer's authorization to debit his or her transaction or share draft account in the amount of the advance plus a fee, where such account will be debited on or after a designated future date.
Amends the Federal Deposit Insurance Act to prohibit an insured depository institution from: (1) making any payday loan, either directly or indirectly; or (2) making a loan to another lender for purposes of financing, refinancing, or extending a payday loan.
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