A company that has a cash-advance branch office in Oak Harbor is one of two businesses that may have to pay a record $1.2 million in penalties and could be forced out of the state.

The state Department of Financial Institutions filed charges Jan. 4 against payday lenders Advance Til Payday and Zippy Cash, alleging that the lenders made over 400 loans in excess of the state’s $700 maximum loan amount, according to the institute.

A branch of Advance Til Payday is located on SE Pioneer Way. The company shares common ownership with Zippy Cash.

The state intends to revoke both companies’ licenses, ban the owners from doing business in Washington, impose fines, order restitution, and charge for the cost of the investigations, the institute reports.

The Department of Financial Institutions claims that Advance Til Payday made loans as high as $3,450 by lending to the same individual at different branches.

Payday lending companies offer short-term loans with extremely high interest rates. The institutions gave as an example that a 14-day, $500 payday loan with the maximum fee permitted by statute would have an annual percentage rate of 391.07 percent.

The U.S. military has long been concerned about high-cost predatory lenders, commonly known as “payday lenders,” targeting military families.

A 2005 report to the U.S. Congress entitled “Predatory Lending and the Military: The Law and Geography of ‘Payday’ Loans in Military Towns” finds that payday lenders do aggressively target financially vulnerable American military personnel and that the current consumer protection rules aren’t working.

National Public Radio reported that scores of U.S. military personnel are falling deeply into debt after taking on loans from storefront lenders who charge sky-high interest and fees.

“The military is looking to state lawmakers for action, but few states have responded,” the NPR report states.

You can reach News-Times reporter Jessie Stensland at jstensland@whidbeynews

times.com or call 675-6611.