Herb & Marion Sandler, the founders of Center for Responsible Lending, and two of the culprits behind the subprime mortgage meltdown, are still in the news:

Major media have begun to scrutinize the Sandlers’ role. Time magazine has listed them among the 25 people most responsible for our crisis. Last Sunday, CBS’ “60 Minutes” featured a segment on World Savings. The “Pick-A-Pay” methodology was the focus. A whistleblower, Paul Bishop, was the star. He had warned the top management at World Savings that loans were being aggressively promoted and made to people with little or no regard for their ability to afford them. The term “Enron” was waved about like a red flag but to no avail.

The Center for Responsible Lending has been extremely quiet about the Sandlers. 

Ted Saunders, the CEO of Checksmart, an Ohio-based payday lender, has a great op-ed in the Cleveland Plain Dealer today:

The simple fact, one that your article failed to accurately note, is that borrowers under the Mortgage Loan Act are paying far less for their loans than they were under the former payday loan laws. When a borrower takes a check or money order as proceeds of a loan, the borrower may (and many do) take that instrument to his or her bank and deposit it free of charge. For the borrowers who deposit or cash their checks at their own bank, their real cost for a two-week $400 loan is under $30, which is less than the $60 paid by them under the former payday loan law and less, according to the FDIC, than the cost of an overdraft at an FDIC bank.

The Plain Dealer’s criticism of former payday lenders turning to other legislative enactments for alternative business models is misguided because it fails to recognize the significant cost savings benefitting consumers and because the decision to turn to these alternatives came directly from the Ohio Legislature. Apparently, in The Plain Dealer’s eyes, only banks should be permitted to extend credit to Ohioans, regardless of their higher fees.

The editorial writers at the Cleveland Plain Dealer are reflexively hostile to business.  It’s great to see a payday lending CEO taking them to task.

The Payday Pundit is guilty of one of the five.  We won’t say which one.

I can’t read too many of these editorials– their shallow snap-judgements make my head hurt. Still, living in Utah, I had to answer this one and submitted the following to the comments section:

Let’s not make snap judgments based on sensational numbers and economic reactionism without exploring the issue beyond the rants of an editorial page.

A) Payday Lenders don’t give money capriciously. No one would receive a $300 loan with a $400 paycheck. Customers must qualify with a job, a checking account and can’t borrow more than 30% of their net paycheck.

B) APR calculations work when a rate is paid annually. Payday loan terms are for a maximum of 18 days. Rates demonized by quoting an APR instead of actual cost are misleading- which is usually why they’re inevitably the first thing mentioned for “shock and awe” in opinions speaking against payday loans.

C) Cries of “loan sharking” come from a single digit minority who abuse the service and subsequently attack the industry to liquidate their irresponsibility. People laugh at the obese who lazily sue fast food restaurants in the wake of poor decisions, but cry for blood when it comes to the financial equivalent.

Payday loans DO need regulation. There CAN be middle ground. Let’s ease the shrill reactionism and ignorant indignation and give way to reasoned, fair discussion– accepting that, for many, payday loans are helpful and appreciated.

I know about the fees charged by banks on unemployment benefits first-hand. I called to complain and they don’t care. The state governments really sold out their constituents on those deals.

We think this Marketplace story confused a different type of lender with a payday lender:

Nancy Marshall Genzer: This is the enemy:

Ad: If you are active duty or retired military, and you need a computer, TV, electronics, furniture, than you need to visit . . .

That’s a payday lender ad targeting military personnel. Used to be that short-term loans carried triple-digit interest rates for service members. Congress capped those rates for them.

Even so, lenders target service members routinely, says Michael Lehnert, a Major General in the Marines. He says lenders know a bit about military culture and like service members’ steady pay.

We know of NO “payday lenders” who are making loans to the military.  The 36% percent rate cap on loans to military personnel effectively barred the service.

They’re charging fees on unemployment benefits.  Read about it on ABCnews.com.

Some lenders’ collection practices give all payday lenders a bad name.  PDLindustryblog has some thoughts.

Before the economic downturn, that might have been an oxymoron.  Not anymore according to this piece.

Interesting story of a woman and her family who have learned how to save money.