The Bank of Wal-mart
July 7, 2010 | alternatives, industry, international | Comments (0)Talk about competition. From the story:
The Bank of Wal-Mart is still just an idea in the U.S., where banking industry lobbyists have convinced politicians to stymie the retail giant’s attempts to gain full banking privileges. In Canada, however, Wal-Mart is licensed as an official bank and is planning to launch a credit card.
Living in an alternate reality
July 6, 2010 | alternatives, industry, international | Comments (0)An oped by someone from the New American Foundation demonstrates that some of our critics simply don’t live in the real world:
For more than two decades, Britain has operated a publicly financed “social fund” to provide short-term credit to low-income families. Here’s how it works: Families currently receiving public assistance — such as the British versions of unemployment insurance or welfare — can qualify for two types of loans. “Budgeting loans” provide families with a lump sum to make substantial household purchases such as a refrigerator or stove. “Crisis loans” are a last resort for families who experience an emergency that leaves them unable to meet basic expenses such as food and gas.
Is this person aware that payday loans are booming in Britain and that recently reguators decided not to cap interest rates?
Sense in Britain
June 15, 2010 | industry, international, regulation | Comments (0)From the story:
The Office of Fair Trading (OFT) has backed away from recommending price controls on expensive forms of short-term borrowing.
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“In a number of respects, these markets work reasonably well in that they serve borrowers not catered for by mainstream suppliers, complaint levels are low, and there is evidence that for some products, lenders do not levy charges on customers who miss payments or make payments late,” the OFT said.
Another Canadian province in play
June 9, 2010 | industry, international | Comments (0)A just love the name Saskatchewan. From the story:
Saskatchewan has drawn up regulations for the payday loan industry and hopes to have them in effect before the end of the year.
The regulations will require payday loan operations to be licensed at a cost of $2,000 per location while payday loan agreements will be required to be in writing and provided to customers.
The lie has spread to India
April 6, 2010 | industry, international | Comments (0)From a Reuters report on Treasury Secretary Geithner’s trip to India:
The US also has around 17 million people without a bank account, according to the Federal Deposit Insurance Corp. Many of these people were victimised by predatory practices of unregulated financial firms such as payday lending shops in the years running up to the financial crisis of 2008-09.
Of course, ALL payday lending customers are banked and the industry had NOTHING to do with the financial crisis.
Pawn shops boom…in Russia
March 24, 2010 | alternatives, international | Comments (0)From the story:
The clients who descend into Nadezhda Sedova’s basement pawnshop often unload their problems along with their valuables. Some are struggling to pay for medicines, others are living paycheque-to-paycheque, still others need a cash injection for a much-needed holiday.
“I hear stories about their families and their grandchildren,” Ms Sedova said through the small window in the protective booth where she sits. “Sometimes it’s easier for them to talk about their problems with strangers than with friends or families.”
The economic crisis has hit Russia hard, with rising unemployment and large swathes of the economy in decline. But for pawnshops such as the one Ms Sedova manages near a busy metro station in northern Moscow, business is brisk. With fewer available bank loans and a significant rise in the price of gold recently, increasing numbers of Russians are turning to pawnshops to make ends meet.
New Canadian rules take effect
February 23, 2010 | industry, international | Comments (0)We missed this from yesterday:
Under the new Loans Regulation, payday loan companies in Alberta will now only be able to charge a maximum of $23 for every $100 borrowed.
Though the Alberta government introduced the new rules last year, the maximum rate limit required federal approval before coming into effect.
“Payday lenders now have very clear rules to follow that give borrowers an accurate picture of how much a loan will cost and limits how much they can be charged,” said Service Alberta Minister Heather Klimchuk in a statement. “The federal government’s approval of the maximum cost of borrowing is the final piece of the regulation that provides consumers with strong protection.”
It’s neither here nor there, but Canadians are having a bad winter Olympics. The red, white and blue is cleaning up.
Overdraft is more expensive
February 12, 2010 | alternatives, industry, international | Comments (0)Even in Great Britain. From the story:
Payday loans have recently come under fire for charging interest rates of more than 3000% but an investigation has revealed that unauthorised bank overdrafts carry even higher charges.
The UK’s part-nationalised banks can be more expensive than going to a payday loan company, who charge high interest rates for short-period loans.
Lloyds TSB, which received support from the government through the recession, would charge £216.32 interest on a customer’s current account if they were overdrawn by £150 for 10 days.
Nice to see even the British are waking up to this.
Another country heard from
February 3, 2010 | federal legislation, industry, international | Comments (0)Someone at “Americablog” in Paris is whining about opposition to the CFPA, too. I don’t know how they do things in France, pal, but in America we have the right to lobby, to buy ads, to otherwise make our opposition to onerous government regulations known. Oh, and bon jour!
APR, wrong way to judge PDLs
January 27, 2010 | industry, international | Comments (0)We normally don’t comment on company news releases, but we thought this one out of Britain makes good points about the payday lending service:
Although they are often manipulated by lenders to look more attractive than they actually are, APR can be a good measurement for comparing long-term loans or for comparing loans of a similar type, but they are not suitable for comparing short-term loans such as payday loans.
Ohad Hessel, Marketing Manager at PaydayBank says that while the APR on a typical payday loan can look very expensive at first glance, this yearly calculation is the wrong way to compare them to other types of loan.
” APR is the wrong way to judge payday loans because they are short term loans for relatively small amounts of money, designed to be repaid quickly. “
