Montana battle heats up
September 1, 2010 | Montana | Comments (0)From the story:
Opponents worry an initiative to cap interest rates on payday loans could drive them out of business.
Voters will decide Initiative 164 in November. Wednesday, supporters rallied in Missoula. Right now, lenders can charge more than 400% interest annually. The measure would cap the rate at 36%.
One payday lender thinks it’s a bad idea. She worries about what her clients will do if lenders start going out of business.
“They can’t go to their banks and borrow just $300 to buy groceries for their kids or your know, I’m worried about what the people are going to do,” Quik Check’s Jill Wright said. “How many are going to not pay their rent and be out on the street?”
The problem with ballot initiatives is that citizens with no experience with payday loans are influenced by the media coverage and we know how unfair that is.
Colorado rules
September 1, 2010 | Colorado | Comments (1)From the story:
Payday lenders will be required to give pro-rated refunds to customers who pay off their loans early, The Pueblo Chieftain reports.
Under enforcement rules adopted Tuesday by the Colorado Attorney General’s office, payday lenders cannot keep origination fees for their loans.
Reconsidering in Jackson
August 31, 2010 | Mississippi | Comments (0)From the story:
Restricting the high amount of interest a quick-cash company charges its borrowers would put the company out of business, Scott Putnam told the Jackson County Board of Supervisors on Monday.
Putnam told the board people in Mississippi need the option of payday loans. He said they are a cheaper option than the alternative, which is writing a bad check and being charged an over-draft fee by a bank or credit union.
Speaking on behalf of an association for quick-cash lenders in the state, he also said 4,000 people in Mississippi make a living writing short-term, high-interest loans.
Putnam’s plea, along with calls they got from legislators and state financial officials, convinced some members of the Board of Supervisors to reconsider a stand it took last week against predatory lending that exploits low-income and desperate people. The board had voted to ask the Legislature to let laws expire that support high-interest loans and then cap annual interest rates at 36 percent.
Supervisors rescinded that vote Monday, saying they needed to look into the issue more thoroughly.
Rules
August 26, 2010 | Colorado | Comments (0)There’s a big fight in Colorado over the proposed payday lending rules.
Booming in Wyoming
August 25, 2010 | Wyoming | Comments (1)From the story:
As Wyoming weathers the economic downturn, one business sector is seeing significant growth: payday lending. Marc Homer, director of Wyoming Kids Count, says the amount loaned has risen 10 years in a row, and is up 15 percent in a year.
———————————-
Payday lenders say they offer a needed financial product to high-risk borrowers shunned by banks. Homer says families in a financial pinch need better options. He wants Wyoming to join a number of states that are regulating the industry by capping interest and fees, and limiting the number of loans per year, as well as helping establish partnerships with credit unions to offer short-term small loans.
If we can make it there…
August 24, 2010 | New York | Comments (2)Interesting story out of New York:
State legislators in Albany are considering a bill that will allow check-cashing stores to make small loans, providing a new route to quick, short-term credit for hundreds of thousands of New Yorkers. Opponents of the measure fear that low- and middle-income earners will be trading temporary relief for longer lasting financial hardship.
The bill, known as the Short-Term Financial Services Loan Act, would authorize registered check-cashing stores to make loans between $300 and $2,000 for 90 to 180 days. Loans can’t be more than 25 percent of a borrower’s gross monthly income; installment repayments must be 10 percent or less.
“I don’t know whether the banks were at all interested in getting at these small amounts,” said Assemblywoman Joan Millman (D-Brownstone Brooklyn). She indicated that the bill could come up for a vote when the legislature reconvenes shortly after Labor Day. Millman became a co-sponsor because there are many “people who could benefit, people living from paycheck to paycheck.”
Local restrictions in Des Moines
August 24, 2010 | Iowa, local issues | Comments (1)From the story:
Restrictions proposed by a Plan and Zoning Commission subcommittee include the prohibition of pawn and payday loan operations in neighborhood retail and neighborhood pedestrian commercial districts. The businesses would still be allowed in eight other business and industrial districts.
A quarter-mile separation between the businesses and a 150-foot buffer from residential districts could also apply.
“I want the strongest, legally sound ordinance” possible, City Councilman Brian Meyer said.In mid-May, the City Council enacted a 180-day moratorium on new pawnshops and payday lenders amid growing concerns about their proliferation and impact on neighborhoods.
Debate brewing in Wyoming?
August 23, 2010 | Wyoming, customers | Comments (1)From the story:
According to a press release from the Wyoming Children’s Action Alliance and Kids Count, citing figures from the Wyoming Department of Audit, the amount loaned was about $26 million in 2000. That amount has increased each year, with about $92 million loaned in 2009.
The figures indicate that more and more people are coming up short in paying their bills, said Marc Homer, director of Kids Count in Wyoming.
“As times are getting tougher, you see people seeking out more desperate means,” he said.
Homer criticized payday loan companies for taking advantage of low-income people and charging outrageous interest rates, which ultimately trap people in debt and hurt children and families.
The news release said that the typical payday borrower ultimately pays $793 back for an initial loan of $325, and that 90 percent of loans go to people who have borrowed five or more times per year.
But Kevin Williams, the owner of Advance Cash Services here, said his business does not take advantage of people or charge unreasonable amounts, and that payday loan companies have gotten a bad rap.
The industry is growing because it provides a service that customers can’t get elsewhere, he said.
“We service a segment of the community that is ignored by the standard banking and credit card industries,” he said. “(The loans) offer a solution to a short-term problem that a family has.”
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.
Montana
August 19, 2010 | Montana | Comments (0)Interest rate cap initiative cleared by the court for November ballot. From the story:
A divided Supreme Court on Tuesday turned down a request from the Montana Consumer Finance Association and the treasurer of the group opposing Initiative 164 to strike it from the ballot.
If approved by voters, I-164 would cap the interest rate charged by these lenders at 36 percent annually.
The court decided, by a 4-2 vote, to allow the initiative to appear on the ballot, but to slightly amend the for-and-against statements and the statement of purpose on the ballot.
An initiative to cap interest rates charged on payday and title loans will remain on the November ballot, the Montana Supreme Court has ruled.
