The new California bill
March 29, 2010 | California, industry | Comments (0)Discussed over at PDLindustrynews.com.
Comment of the Day
March 27, 2010 | California, industry, regulation | Comments (0)In the comments section of this LA Times story about a bill being introduced in California to cap interest rates on loans to the unemployed at 36%, someone wrote:
It’s a “supply and demand” and a “risk” situation. Similar legislation was proposed in DC and the “Pay Day Loan Companies” moved out to Virginia and Maryland. It’s a sad situation when the State has to engage in private contracts between two individuals. The only thing that it resolves is that more people will be without money or short-term loans and there will be less revenue, in the form of income taxes, going to the State and business licensing fees to the local governments.
Instead of passing stupid laws like this to “control behavior,” how about passing appropriations that get people out of this pickle, like relevant job training programs?
Stupid laws by stupid people. Now you know why California is broke.
Self congratulations
March 24, 2010 | California, industry | Comments (0)A bunch of anti-business groups met in California to have a one-sided discussion about payday loans. They concluded that everyone that attended is virtuous, noble and kind to animals. From the story:
The meeting itself was a valuable, responsible discussion because it addressed the root causes and all the different forces at work in this issue. Emmet Carson of the Silicon Valley Community Foundation ended the gathering: “Remember: It’s not the things you don’t know that get you into trouble- it’s the things you know for sure that are not so.”
It would have been even more valuable if they had someone from the payday lending industry there. Or how about one of our satisfied customers?
What about the millions helped?
March 1, 2010 | California, customers, industry | Comments (0)The Los Angeles Times has a big story today about some payday lending companies loaning money to the unemployed and, of course, focuses on a couple of instances where the loans were a bad choice. It was good of them them to included this, though:
An unemployed borrower who gave his name only as Oscar exited Ace Cash Express in Van Nuys on a recent afternoon. He said he lost his job at a garden sprinkler installation company a year ago and has been depending on unemployment insurance ever since. He said he borrows against his benefit checks at payday loan stores to make ends meet.
“It helps me pay for food, for my apartment, other expenses,” he said in Spanish, tucking an envelope of cash into his wornjeans.
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And CFSA spokesperson Steven Schlein, had this to say in response to critics of the industry:
“Who are they to decide?” Schlein said. “We issue billions of dollars of credit. They issue platitudes and pats on the back.
Pawn booms in San Fran
February 19, 2010 | California, industry | Comments (0)From the story:
Besides the increase in loans, Genove says more and more people are opting to buy gifts in pawnshops than in regular stores, a sign that people want to get more bang for their buck, especially now that money is harder to come by.
That San Fran “alternative”
January 25, 2010 | California | Comments (0)PDLindustrynews has some good comments about it.
Bring on the competition
January 22, 2010 | California, alternatives, industry | Comments (0)S.F. Mayor Gavin Newsom touts the new local payday loan “alternative” in today’s Huffington Post. His trashing of payday lenders, however, is misguided and uninformed.
The payday lending “public option”
December 26, 2009 | California, alternatives, industry | Comments (0)The more I think about it, the more San Francisco’s payday loan “alternative” seems to be the payday lending version of the “public option” that became so controversial during the health care debate. That’s why a lot of the same kind of groups that supported the health care public option support this plan as well.
Praise for S.F.’s “alternative”
December 21, 2009 | California, alternatives, industry | Comments (0)Although we all know it’s not really an alternative because the terms are very different than a payday loan. From the LA times:
California, though, has largely stood by, even as the soaring number of payday lenders in the state has surpassed the number of McDonald’s. There were more than 11 million payday loan transactions in California in 2008, according to the California Department of Corporations.
San Francisco and the credit unions are taking an important first step to solve the problem. The new loans will set up cash-strapped consumers to succeed, not fail. You can borrow up to $500, and, crucially, you don’t need to pay it all back two weeks later. You can spread out your payments up to six months. And the interest rate is 18%.
A six-month loan is not a payday loan.
S.F. gets into payday lending
December 18, 2009 | California, alternatives, industry | Comments (0)A new payday loan “alternative” announced yesterday with great fanfare:
Now San Francisco residents have another choice, unveiled on Thursday by the mayor and Treasurer Jose Cisneros. It’s called Payday Plus SF and it’s an option to what critics call the predatory practices of payday lenders.
“It’s one thing to criticize these APRs that are as much as 400-500 percent, but if you don’t have an alternative, it’s unfair to criticize. So we are trying to offer an alternative,” said Newsom.
The city is teaming up with six credit unions and their branches to offer loans of up to $500 with a maximum interest rate of 18 percent and a year to repay.
“It’s an opportunity to extend that kind of credit to people who would otherwise not have access to quality rates,” said Margaret Libby from Mission San Francisco Federal Credit.
From what we know so far, the loan also has an application fee and longer terms.
