Interesting piece from Frank A. Weil on The Huffington Post: 

So we are facing a conundrum in how to break the vicious cycle of misunderstanding that can lead to perverse government policy action and mistakes. If knowledgeable and sincere elected officials are out of reach, along with a well-educated citizenry, perhaps something like the trade legislation method is needed to get complex economic/tax/financial matters passed through Congress. Such an approach might allow us to overcome the limited understanding that undermines our democracy and puts us all at risk.

From the story: 

According to a press release from the Wyoming Children’s Action Alliance and Kids Count, citing figures from the Wyoming Department of Audit, the amount loaned was about $26 million in 2000. That amount has increased each year, with about $92 million loaned in 2009.

The figures indicate that more and more people are coming up short in paying their bills, said Marc Homer, director of Kids Count in Wyoming.

“As times are getting tougher, you see people seeking out more desperate means,” he said.

Homer criticized payday loan companies for taking advantage of low-income people and charging outrageous interest rates, which ultimately trap people in debt and hurt children and families.

The news release said that the typical payday borrower ultimately pays $793 back for an initial loan of $325, and that 90 percent of loans go to people who have borrowed five or more times per year.

But Kevin Williams, the owner of Advance Cash Services here, said his business does not take advantage of people or charge unreasonable amounts, and that payday loan companies have gotten a bad rap.

The industry is growing because it provides a service that customers can’t get elsewhere, he said.

“We service a segment of the community that is ignored by the standard banking and credit card industries,” he said. “(The loans) offer a solution to a short-term problem that a family has.”

BorrowSmart of Mississippi is alway out front.   From the story: 

Borrow Smart Mississippi, an association that regulates payday lenders, say their practices are fair.  

Spokesperson, Dan Robinson says often the misconception is payday lenders over charge customers because of their 18 percent fee for every $100 dollar transaction.

He says they are not like banks and credit unions that operate on an annual percentage rate basis.

“I know that the rates are much cheaper than what the other services out there are,” Robinson said.

He disagrees with the Center for Justice’s approach to lawmakers and says payday lending in Mississippi would go out of business if this legislation passed.

“There’s no possible way to do it for 36 percent, you can’t pay the rent on this building for $1.38 cents on a hundred.”

In addition, Robinson says the claims from the Center for Justice are false, and they will not pursue immediate legal action if a customer can’t pay.

They took effect this weekend.  From the story: 

To begin with, consumers can expect their February credit card statements to have a new look, such as providing more information about how long it will take to payoff debt as well as contact information for nonprofit credit counseling agencies.

Hard to argue with that rule.

“Marketplace” goes there.

This kind of analysis has got to stop.  From the story: 

Since Elizabeth Warren, the TARP overseer who is being considered to lead the new Consumer Financial Protection Bureau, has been meeting with bank lobbyists to discuss her views on consumer-protection issues, it seemed worthwhile to find out how the financial sector views Warren. Concept Capital, a firm that provides a variety of support services to investment funds, released a research note [PDF] on the relative merits of Warren and Assistant Treasury Secretary Michael Barr, another top candidate for the post.

“We increasingly see Elizabeth Warren as a better choice,” the firm’s analysis concludes, suggesting that Barr might be a more effective antagonist to industry because he is perceived to have better relationships on the Hill and is less involved in political debates, while at the same time inevitable pressure from progressives would force him to take a stronger line out of the gate. Warren’s supporters pointed me to this item:

The argument has often been that only President Nixon – an avowed anti-communist – could open the door to relations with China. This is because the right could never accuse him of being soft on communism. Well the same could be true for Warren. If Barr tried to take a middle-of-the-road approach, progressives might attack him for being too friendly to industry. We have trouble seeing progressives attack Warren.

From The Hill:

The White House does not expect to announce a nominee to head the new consumer financial protection agency within the next two weeks.

Bill Burton, deputy press secretary, told reporters Thursday not to expect an announcement “any time soon,” saying two weeks would be soon.

Americans for Fairness in Lending is waging a grassroots effort in support of Elizabeth Warren.

Interest rate cap initiative cleared by the court for November ballot.   From the story:

A divided Supreme Court on Tuesday turned down a request from the Montana Consumer Finance Association and the treasurer of the group opposing Initiative 164 to strike it from the ballot.

If approved by voters, I-164 would cap the interest rate charged by these lenders at 36 percent annually.

The court decided, by a 4-2 vote, to allow the initiative to appear on the ballot, but to slightly amend the for-and-against statements and the statement of purpose on the ballot.

An initiative to cap interest rates charged on payday and title loans will remain on the November ballot, the Montana Supreme Court has ruled.

We knew that, but it stands repeating.