The Phoenix Business Journal reports that “200isNoReform.com” is now “Arizonians for Responsible Lending,” yet another branch of the Center for Responsible Lending and is working to strip Arizonians of their financial choices by capping payday lending at a 36% annual interest rate. The Payday Pundit has said it once and will probably have to say it a million times…payday loans are not annual loans, they are not mortgages, they are short term, low dollar loans. Applying an annual interest rate to them is akin to trying to rent a car for a weekend and the agent telling you how much it would be to buy the car. It makes absolutely no sense.
Categorized | Center for Responsible Lending, regulation
2 Responses to “CRL steps up efforts to ban payday lending in Arizona”
Trackbacks/Pingbacks
Leave a Reply
- Round of applause
- Let’s try not to make generalizations
- Quote of the day (from Tuesday’s Senate Banking Committee Hearing)
- Dear banks, make your disclosures more clear, Date says
- Cordray nomination passes Senate Banking Committee
- President Obama blasts BofA’s $5 debit card fee
- CFPB says ‘We’re listening’
- Update on Cordray
- And on that same topic, your Quote of the Day
- Do restrictions work, or are consumers going to unregulated entitites?
-
Payday Pundit: Thank you for asking! Please feel free to use our ...
-
-
Jer Ayles-Ayler: We can only hope a journalist at Today will attemp...
-
Phil: I think check n go is thriving in this fierce comp...
-
Donya Jadlowiec: Hello could I use some of the material found in th...
alternatives Arizona Arkansas ban bank fees bans best practices bounced check fees Center for Consumer Freedom Center for Responsible Lending Cleveland Plain Dealer Colorado Columbus Columbus Dispatch consumer choice credit cards customers D. Lynn DeVault employees FDIC financial choice HB 545 Herb Sandler Issue 5 job loss local issues Missouri New Hampshire North Carolina Ohio Oregon overdraft protection payday loan alternatives rally rate cap rate caps research South Carolina South Carolina payday lending state regulation The State Virginia WalletPop Wall Street Journal washington state payday lending
-
Stay up to date
- Subscribe to the RSS feed
- Subscribe to the feed via email
© 2011 Payday Pundit. Powered by CFSA.
The rent-or-own metaphor doesn’t work. Whether I borrow $100 for 2 weeks or 52, I am renting the money. If you charge me $15 a year for the service, the APR is 15%. If you charge me $15 for 2 weeks, the APR is 391%. In order for me to know how expensive each loan is, I need a common measure of the interest charge. That’s what the APR is.
TILA requires you to disclose the APR so that consumers can make comparative judgments. Markets won’t function well if there is information failure. This is elementary economics.
In the olden days they used to state the interest charge as a monthly rate. We could do the same thing today, but payday loans wouldn’t smell any sweeter. If 36% a year is 3% a month, then $15 every two weeks is 33% a month. That’s still a loan shark rate.
$15 per every hundred is 15% period.