Comments on: “Web loans are becoming more widespread as local governments restrict payday loans” http://paydaypundit.org/2008/05/27/web-loans-are-becoming-more-widespread-as-local-governments-restrict-payday-loans/ News and Information About The Payday Lending Industry Fri, 18 Jun 2010 21:33:31 -0700 http://wordpress.org/?v=2.9 hourly 1 By: Jon Schultz http://paydaypundit.org/2008/05/27/web-loans-are-becoming-more-widespread-as-local-governments-restrict-payday-loans/comment-page-1/#comment-225 Jon Schultz Wed, 28 May 2008 03:48:33 +0000 http://paydaypundit.org/?p=512#comment-225 I should amend my previous comment so as not to accuse CFA of making up false stories when they may not have. Perhaps they, or the reporter, simply got the facts wrong or perhaps it was an unscrupulous website which tried to debit the customer's bank account multiple times and charged an NSF fee for each time it tried. I don't know what the legal limit on that is so I guess the $557 figure is not outside the realm of possibility. Even I sometimes put my foot in my mouth... I should amend my previous comment so as not to accuse CFA of making up false stories when they may not have. Perhaps they, or the reporter, simply got the facts wrong or perhaps it was an unscrupulous website which tried to debit the customer’s bank account multiple times and charged an NSF fee for each time it tried. I don’t know what the legal limit on that is so I guess the $557 figure is not outside the realm of possibility.

Even I sometimes put my foot in my mouth…

]]> By: Jon Schultz http://paydaypundit.org/2008/05/27/web-loans-are-becoming-more-widespread-as-local-governments-restrict-payday-loans/comment-page-1/#comment-224 Jon Schultz Wed, 28 May 2008 01:18:47 +0000 http://paydaypundit.org/?p=512#comment-224 573% is $22 per $100 loaned so the fee for a $183 loan would be $40. There's no way that could become anywhere near a $557 debt one month later. Will these reporters ever do their homework... It's interesting that whereas most of the payday loan stores in Oregon closed after the recent legislation was implemented, every CFSA company I know of which makes loans over the Internet still does so in Oregon. That may indicate that Internet loans can be offered cheaper than storefront loans as the process is more automated and there is no rent to pay. Customers may also prefer the convenience and privacy of an Internet loan. If the Consumer Federation of America wanted to provide a real service they'd simply make people aware that there is a wide range of pricing on the Internet and point out the least expensive sites run by licensed companies. That would have value, whereas making up implausible stories about customers being charged very high fees does no one any good at all. 573% is $22 per $100 loaned so the fee for a $183 loan would be $40. There’s no way that could become anywhere near a $557 debt one month later. Will these reporters ever do their homework…

It’s interesting that whereas most of the payday loan stores in Oregon closed after the recent legislation was implemented, every CFSA company I know of which makes loans over the Internet still does so in Oregon. That may indicate that Internet loans can be offered cheaper than storefront loans as the process is more automated and there is no rent to pay. Customers may also prefer the convenience and privacy of an Internet loan.

If the Consumer Federation of America wanted to provide a real service they’d simply make people aware that there is a wide range of pricing on the Internet and point out the least expensive sites run by licensed companies. That would have value, whereas making up implausible stories about customers being charged very high fees does no one any good at all.

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