To all the media hypocrit(ics)…
March 4, 2010 | Ohio, customers, industry critics, positive media coverage, regulation | Comments (0)Don’t let the coattails drag! Robert Nozar’s column in Cleveland’s Sun News this morning reveals the hypocritical nature of the media when it comes to payday lending:
Part of the answer to that question lies with the fact that there are members of the media who willingly hold the coats of those politicians so engaged in the battle to cast an unneeded and unwanted presence in those lives.
While those very same columnists and commentators would take issue with government intrusion in other areas, they are very willing to prod, cheer on and otherwise abet paternalistic politicians when their own senses of morality are challenged by that which they find distasteful.
Payday loans are one such “egregious” infringement on the “morality” of those who would presume to speak for the masses.
Never mind that those who object have never needed a payday loan themselves, and likely have never heard a legitimate complaint about a payday loan from a person who has taken out such a loan.
Dear media, please stop trying to control other peoples’ lives on something with which you have no experience.
Responsible customers
March 2, 2010 | Missouri, industry, positive media coverage | Comments (0)QC Holding’s Tom Linafelt hits back at the St. Joe’s (MO) News:
For those who have difficulty meeting their loan obligations, payday lenders offer extended payment plans that provide an additional two months to pay off what was originally a two-week loan, without additional fees.
Proposed Missouri legislation that includes a 36 percent APR cap would eliminate the industry and an estimated 10,000 jobs, $379 million in annual wages, $147 million in tax revenue and more than $20 million in commercial real estate lease payments.
Now is not the time to deny an important credit option for those who need it most, nor is it time to eliminate Missouri jobs.
Stunningly balanced column
February 27, 2010 | Colorado, industry, positive media coverage | Comments (0)Hats off to Vincent Carroll at the Denver Post:
Still, what’s the alternative for these serial borrowers, and for the many others who use payday loans as an occasional cushion against an unexpected expense or to pay a bill that can no longer be ignored? These people have jobs and checking accounts, otherwise they wouldn’t qualify for a payday loan. They’re not mentally incompetent. They make choices involving money all the time.
And they are far better aware of their actual options — excruciatingly aware, no doubt — than lawmakers or the average voter.
The Bell Policy Center, an ardent opponent of payday loans, lists what it considers options to payday loans in its 2008 report, “The Truth About Payday Loans.” They include “borrowing from family and friends,” “using a cash advance from a credit card,” “using overdrafts” and “receiving money from a charity or church.”
However, consumers also pay dearly for cash advances and overdrafts. According to a USA Today analysis last year, bank overdraft fees applied to two weeks of credit are equivalent, on average, to an APR of 696 percent — far higher than the APR for a payday loan.
More pickup of Banks/PDL story
February 26, 2010 | alternatives, federal legislation, industry, positive media coverage | Comments (1)This time the Bloomberg story appears in the Pittsburgh Post Gazette:
Banks including Fifth Third Bancorp, Wells Fargo & Co. and U.S. Bancorp already are making such loans, charging $10 for every $100 borrowed for 30 days — the equivalent of an annual interest of 120 percent. The loans, which they call “checking advance products,” are comparable to those made by so-called payday loan stores, which target customers who generally don’t have credit cards to bridge the gap until their paychecks come.
“The smarter banks are trying to resell overdraft protection to consumers as a different product,” said Elizabeth Rowe, group director of banking advisory services at Mercator Advisory Group in Maynard, Mass. They don’t call the advances “payday” loans because it’s a “very tarnished, negative brand.”
Editorial support in Colorado!
February 25, 2010 | Colorado, industry, positive media coverage, regulation | Comments (0)“Regulations are tough enough” says the Daily Camera:
In these disastrous economic times, “regulation” and “oversight” have become popular battle cries. But payday lending is highly regulated industry, already — with caps and fee structures that are actually quite stringent when compared with other lenders. The rules on payday lending in Colorado are tough enough.
Driving legitimate businesses, and employers, out of business would also deprive hundreds of thousands of credit-challenged Coloradans emergency funding — to fix their cars, to keep their apartments, to pay an unexpected health bill — at precisely the wrong time.
Banks getting into PDL
February 23, 2010 | alternatives, federal legislation, industry, positive media coverage | Comments (1)A Bloomberg story picked up by Businessweek discuss how banks need to make up for lost overdraft revenue by getting into payday lending:
“The smarter banks are trying to resell overdraft protection to consumers as a different product,” said Elizabeth Rowe, group director of banking advisory services at Mercator Advisory Group in Maynard, Massachusetts.
Banks including Cincinnati-based Fifth Third Bancorp, San Francisco-based Wells Fargo & Co., the fourth-largest U.S. bank, and U.S. Bancorp, based in Minneapolis, are already making such loans, usually from $100 to $500, at annual rates of 120 percent if repaid in 30 days. They’re known as “checking advance products.” That puts them in competition with so-called payday loan stores, which make loans with similar terms to customers who generally don’t have credit cards to bridge the gap until the check comes, according to Rowe, whose firm advises banks.
New regulations “misguided”
February 19, 2010 | Wisconsin, positive media coverage, regulation | Comments (0)From Wisconsin Radio Network:
Wisconsin Consumer Credit Counseling Services director Ken King says the proposals being considered at the Capitol right now amount to a restraint on trade that will actually hurt consumers. He says it takes away an option for obtaining credit for low and moderate income individuals who need a short-term loan.
King says such services can be crucial for someone who needs to borrow money to fix a car so they can get to work.
Must read of the day
February 19, 2010 | federal legislation, industry, positive media coverage | Comments (0)What caused the financial crisis? Not complex loans according Professor Todd Zywicki of George Mason University. From the Wall Street Journal oped:
Regulatory reform that can improve competition and consumer choice in financial services is long overdue. But no new federal bureaucracy such as the Obama administration’s proposed Consumer Financial Protection Agency (CFPA) is needed to bring that about.
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So the problem isn’t consumer gullibility or ignorance. Borrowers have shown they understand, and act on, the incentives they face all too well.
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Thus a lender’s elimination of universal default will have to be offset by higher interest rates or fees. To the extent that a CFPA makes access to credit cards less available, excluded borrowers will inevitably shift to more expensive alternatives such as payday lending or pawn shops. If the CFPA were to impose bans on efficient risk-based pricing by lenders in the name of vague claims about “fairness,” the likely result will be to increase overall risk and make the next financial crisis more likely.
A good read
January 22, 2010 | industry, positive media coverage, research | Comments (0)Thomas Sowell, the free market economist, thinker, educator and columnist, has a new book out, “Intellectuals and Society.” There’s a wonderful section that defends payday lending and other services that represent private sector solutions to the needs of working Americans. You can get Sowell’s book here.
And here’s a column from last April that Sowell wrote in defense of payday lending.
“A needed service”
January 19, 2010 | New Hampshire, industry, positive media coverage | Comments (0)A Center for Consumer Freedom letter in today’s Eagle Tribune (N.H.):
Short-term “payday” lenders have been under attack by state and federal lawmakers who denounce their services as “predatory.” But across the country, borrowers in need of emergency cash choose these loans willingly, over other financial options. Research by a Federal Reserve economist found that 88 percent of short-term borrowers are satisfied with their loans.
