One company responds to Arizona law:

Another article mischaracterizing payday lending customers as “unbanked.”

We do agree though that bank terms are often too complex, which is why payday lenders clearly and transparently explain the cost of our loans to our customers.

Some lenders close, some evolve:

Street corners in Glendale and Peoria are marked by a handful of additional vacant stores since Arizona voters cracked down on payday lending.

Several of the national chains that offered easy money at high interest rates to cash-strapped customers have closed. Check ‘n Go shuttered 100 locations across the state. The companies say they can’t do business with tougher new limits. Other stores have turned to auto-title loans, check cashing and similar services, raising new worries among consumer advocates.

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Industry representatives argue that Peoria and Glendale residents will suffer with fewer ways to get short-term loans during tough times and warn that the state’s economic recovery will be delayed.

Customers turned to payday loans for real needs, lobbyist Lee Miller said, like staving off a foreclosure or making a deposit on a new apartment.

Store closings in Arizona seem to shock some people.  From the story: 

Several of the national chains that offered easy money at high interest rates to cash-strapped customers have closed. Check ‘n Go shuttered 100 locations across the state. The companies say they can’t do business with tougher new limits. Other stores have turned to auto-title loans, check cashing and similar services, raising new worries among consumer advocates.

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.

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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.”

The one option this NPR story leaves off the list is that payday loan stories will close.

From a heated debate going on in the comments section of a Huffington Post story on lenders leaving Arizona:

I’ve taken out a payday loan twice in my life and had no problem paying it back. It was cheaper than overdrafting my bank account.

If the pattern holds true, reporters will now start doing stories about customers who need payday loans but can’t get them.  From the story:

Advance America Cash Advance Centers Inc. announced plans this week to close all 47 of its locations in Arizona, along with 75 locations in several other states.

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Advance America spokesman Jamie Fulmer said last month that the end of payday lending could force customers looking for cash to turn to unregulated Internet loans.

“The consumers who find themselves between paychecks with some type of unbudgeted or unexpected expense should be very concerned about the options left,” Fulmer said.

From the story: 

Payday loan customers in Pinal County already are feeling the impact of the expiration on Thursday of a law allowing the lending practice beginning Thursday.

Under the change, lenders no longer will be allowed to set interest rates as high as 460 percent annually. A 10-year-old law allowing them to go above the 36 percent rate cap for other lenders expires today.

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The Community Financial Services Association of America, an industry trade group, says that although payday loans are expensive, when people are in need of short-term cash they are often glad to have the option available to them.

Many of those who use payday loans have limited alternative sources of credit such as pawn shops, bank overdraft protection, credit card cash advances and informal lenders, according to CFSA,

Efforts to eliminate payday lenders from communities do not address the need some consumers have for short-term credit, and lack of access to the loans could place customers at greater risk for bounced checks, disconnected utilities or lack of funds for emergencies such as medical expenses or car repairs, the organization said.

This story is disturbing.  The eagerness with which some people await the closing of payday lending stores in Ariziona is beyond rational.  They don’t even seen to want lenders to try other services.   This is ideology masking itself as policy.   It’s emotion masking itself as seriousness.