Payday Pundit » Kansas City Star

Misguided editorial; enlightened reaction

tlinafelt — Fri, 19 Aug 2011 14:14:07 +0000

KC Star editors apparently don’t understand that a 36 percent APR cap would eliminate short-term loans in Missouri. Still, some readers understand the provision would deny credit to those who need it most, and that the costs of payday loans are reasonable compared to short-term alternatives…

Payday lending discussed at the Federal Reserve Bank of KC

Payday Pundit — Wed, 25 May 2011 18:40:03 +0000

Yesterday, a debate hosted by the Federal Reserve of Kansas City concerning the merits of payday lending spurned some interesting conversation about the industry and its regulation. Much of the discussion was centered on the Fed’s senior research economist, Kelly Edmiston’s recent study, “Could Restrictions on Payday Lending Hurt Consumers?“. Here’s a taste of what Edmiston concluded from his research:

Edmiston’s study “suggested” that low-income consumers had less access to credit and all consumers generally had poorer credit where payday lending was banned. It may be they have no alternatives or are making costlier choices such as bouncing checks, exceeding credit-card limits or turning to loan sharks.

Bad idea

Payday Pundit — Thu, 10 Sep 2009 11:14:09 +0000

From the Kansas City Star:

Missouri regulators are being asked to impose new rules on how utility bills are paid, including restrictions on allowing payday-loan stores accepting the payments.

Utilities over the years have largely eliminated offices that will accept payments in person. Instead, there’s been growth in places such as grocery stores and payday loan businesses that accept the payments, which are forwarded to the utility.

If it ain’t broke, don’t fix it.

The psychology of debit/credit cards

Payday Pundit — Wed, 14 Jan 2009 13:50:53 +0000

Very interesting column in the Kansas City Star:

My favorite text on behavioral finance is Why Smart People Make Big Money Mistakes. The authors write that credit/debit cards are mental accounts. There is no pain of loss when one pulls out the plastic. Two MIT marketing professors (Prelec and Simester) did a study several years ago to determine how behaviors change when cash is used to settle accounts as opposed to credit/debit cards. They asked students to bid competitively for tickets to a Boston Celtics game.

One group of students was told the tickets required cash purchase. The other group was allowed to bid with credit cards. The study then averaged all the submitted bids. The folks who used credit cards were willing to pay twice as much as the folks who had to part with cash. The seat the folks bought with credit was no closer to the action and the game was no more entertaining than for the folks who paid cash. This is the dangerous part of behavior.

We’re going to..Kansas City…Kansas City here we..

Payday Pundit — Wed, 20 Aug 2008 12:19:40 +0000

Oops, never mind. If city councils in the area keep meddling in free enterprise, the Payday Pundit won’t feel very welcome. This story is about the city council in North Kansas CIty:

The moratorium applies to Burlington Street between 10th and 32nd Avenue and will be in place while the city does a comprehensive study of the Burlington corridor.

It also restricts payday loan shops, industrial businesses, any parking lot with frontage on Burlington, pawn shops, car title lenders, check-cashing lender operations and any motor vehicle repair or service shop.

Will the FDIC small loan compete with payday lenders?

Payday Pundit — Sun, 11 May 2008 12:12:24 +0000

First of all, only 30 banks, generally small local ones at that, have signed up for the program. Second, when customers find out all the strings attached to getting a short-term loan from one of these banks–application fees, minimum balances in a savings accounts, complicated fee structures–they will decide that a payday loan is a better deal. In any case, the market will decide.

This Kansas City Star story has more.