Defending the industry
August 23, 2010 | Financial Reform Bill - CFPB, Mississippi, regulation | Comments (0)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.
Colorado update:
August 8, 2010 | Colorado, regulation | Comments (0)New law take effect on Wednesday:
…..Under HB 1351, payday-loan companies will be limited to charging a monthly maintenance fee of no more than $7.50 for every $300 loaned, capped at $30 a month. The measure also limits the companies from offering new loans to customers for 30 days.
Diversify or…
August 6, 2010 | Arizona, federal legislation, regulation | Comments (1)Latest from Arizona:
Recent changes in the law regarding payday lenders have led many Phoenix businesses that offer the service to diversify their products. But those that decided not to offer additional services are closing, leaving vacant storefronts in dozens of strip centers.——————————————–Many payday lenders in northeast Phoenix offer auto-title loans, check cashing and other services, but Check ‘N Go would rather close than diversify, Rabenold said.“We’re just not title lenders. We’re not good at that. We don’t know that whole industry and that customer base,” he said. “And there’s not enough business, it’s not sustainable, and there’s going to be less business in the future. It just wasn’t going to work out for us.”
So, what’s your alternative?
July 30, 2010 | Texas, best practices, regulation | Comments (0)Borderzine spends a good third of this article discussing folks finding themselves in need of short-term credit and general credit tightening denying even consumers with good credit scores small-dollar loans that they need between paychecks.
It seems unreasonable then to jump into a criticism of payday advances, the one resource that consumers have for these types of loans. The article is clearly poorly research, asserting that there are few regulations (in Texas, of all places, where there are quite a few) and repeating the cycle of debt argument without bothering to find out about the no cost extended payment plan.
Ballot Initiative 164 in Montana
July 28, 2010 | Montana, local issues, regulation | Comments (0)Julie Howen with Title Cash Stores in Montana lends a strong argument against the 36% rate cap proposed in ballot initiative 164. She said:
“Banks don’t want to deal with small amounts or short term loans, that’s one of the biggest issues where we really feel there is a market need.”
Knowing that payday lenders can’t operate under a 36% rate cap, Howen added:
“Bankruptcies go up when we’re not in there and quality of life definitely decreases for many of our customers.”
She’s right to think that supporters of the initiative are people who don’t use the service and “just see the interest rates.”
View full article in KFBB.com
What, partisanship?
July 26, 2010 | Financial Reform Bill - CFPB, federal legislation, regulation | Comments (0)You could knock me over with a feather. From the New York Times:
“A lot of us are terrified about what happens in rule-making,” said Stephen Lerner of the Service Employees International Union, which is pressing the administration to nominate Ms. Warren. “Symbolically, it does seem incredibly important to pick somebody who not only invented the idea, but someone who doesn’t claim to be a neutral.”
Bankers oppose her nomination for exactly that reason. Roger M. Beverage, head of the Oklahoma Bankers Association, said that Ms. Warren was widely respected in Oklahoma, where she was raised and is still remembered as a high school debate champion. But he said that his members did not believe she would understand the needs and concerns of community banks.
Banks will drive us out of business?
July 22, 2010 | Financial Reform Bill - CFPB, customers, federal legislation, industry, regulation | Comments (2)Matt Fellowes at The Huffington Post has prematurely starting playing taps for the payday lending industry. I think several of his premises miss the mark by a mile, including this one:
Just as important, bank shareholders will demand that banks start competing with their newly hobbled fringe counterparts for those 20 million households.
Banks that are scared to death of customers without perfect credit scores are going to look to our customers for new revenues? Well, let them try. We welcome competition.
Freakonomics
July 14, 2010 | federal legislation, industry, regulation | Comments (0)The NYT blog, not the book, discusses the complaints of economists Gary Becker and Richard Posner about the financial reform bill:
The bill adds regulations and rules about many activities that had little or nothing to do with the crisis.
Who knew?
Arizona options
July 13, 2010 | Arizona, industry, regulation | Comments (0)The one option this NPR story leaves off the list is that payday loan stories will close.
Live and learn
July 13, 2010 | Mississippi, industry, local issues, regulation, states | Comments (0)Did you know there’s a West Point, Mississippi? I learned from reading this article on their attempt to ban new payday loan stores.
