Great letter from Ryan Harris of Check into Cash in the Laurel (MS) Leader Call:

Forcing payday lenders to use the same annual rate calculation as other long-term financial products like home mortgages and automobile loans will make it impossible for short-term lenders to operate. This would result in the loss of jobs for hard-working Mississippians and will take away a source of credit for the state’s consumers.

The city based its action on a special report recently published by The Clarion-Ledger newspaper. That newspaper report included several mischaracterizations of the payday advance industry. It is certainly inaccurate to infer that short-term payday loans caused anyone to foreclose on their home.

TheStreet.com has picked up on the fact that many consumers are underserved by banks.  From the story: 

“More people are leaving banks. People are not being underwritten for credit cards, especially at the bottom end. And so the use of alternative financial services has increased significantly in the last few years,” says Arjan Schutte, senior advisor at the Center for Financial Services Innovation, a think tank for expanding access of financial services products to underbanked consumers.

“Even though remittances and check cashing volumes are stable as opposed to growing, there has been tremendous growth in payday loans and there’s been tremendous growth in more payroll agnostic, general purpose reloadable cards which can be used as a payroll card,” Schutte says.

Elizabeth Warren gives an interview to American Public Media’s “Marketplace” show.  You can read or listen here.

The state AGs have been sworn in so to speak.  From the story: 

The attorneys general say they now talk with Warren regularly as she sets up the new bureau. On Nov. 30, Warren traveled to Fort Lauderdale to plot strategy at the prosecutors’ winter meeting. North Carolina Attorney General Roy Cooper says she has sought the AGs’ help in forming new policies for mortgages and credit cards, her priorities. “We are the initial portal of complaints from consumers, and we can react more quickly than a federal agency,” says Cooper, a Democrat. 

From the story:

If the trend continues, experts say, it will set banks on a collision course with their customers and lead to tougher rules that will hurt their earnings.

Complaints against banks are soaring, suggesting that new laws and regulations put in place since the financial crisis two years ago aren’t dampening Americans’ anger over overdraft fees and foreclosure practices they view as unfair.

————————–

Consumer advocates say the punitive fees have hurt bank customers by driving them to use payday lenders and pawnshops. But there’s little doubt that the banks have been hurting themselves too.

What?  Blaming payday lenders for being there for bank customers who need short-term credit?

This city council in Mississippi is apparently following the Virginia model.  From the story: 

The resolution states that “while short-term loans are important, it is equally important that consumers are not taken advantage of through inadequate state laws governing these practices.”

The resolution asks the legislature to enact laws preventing exploitative payday lending during its next regular session including:

• Allow the current repealer, which allows payday lenders to charge interest rates above and beyond the 36 percent imposed on all other financial institutions, to sunset as scheduled in 2012.

Short-term lending is important, but let’s eliminate it through onerous rate caps.

Elizabeth Warren answers five questions from BusinessInsider:

Get yourself registered for CFSA’s annual conference.

More scammers pretending to be collecting on payday loans.  These people are the lowest form of life.

Bank Lawyers blog has had enough of the “nanny state”:

We all know why “the government” (in this case, the FDIC) is getting between the customer and the product. The FDIC thinks that the average customer who uses overdrafts on a regular basis is too stupid to understand what he or she is doing and, therefore, needs the federal government (or, in this case, an agency of the federal government that was established to insure the deposits of certain financial institutions but has that has morphed over the past four and one-half years into a consumer advocacy special interest group) to make sure that they are properly fed, bathed, burped, clothed in warm jammies, tucked in, and kissed goodnight.