I suspect this won’ t last long.

Great story in the Wichita Eagle about a local payday lender, Speedy Cash:

Wichita’s Speedy Cash chain was founded 12 years ago by three guys who grew up together, went to Northwest High and Kansas State together, and went into business together.

It’s another Wichita entrepreneurial success story: Speedy Cash has grown roughly 25 percent per year since then and now has 82 shops across nine states, including six in Wichita.

There are now 116 people working at the corporate headquarters in two buildings at 3527 N. Ridge Road.

But these days, the payday lending industry, including Speedy Cash, is facing some pretty stiff challenges.

You’ll have to read it yourself to see where the “blues” fit it, but it’s a very straightforward, unbiased piece.  And while we’re on the subject of Wichita, can we agree that “Wichita Lineman” is one of the greatest songs ever?

Tom Linafelt of QC Holdings, a Kansas City-based payday lender, gives the readers of the Lawrence Journal some facts: 

According to “An Analysis of Consumers’ Use of Payday Loans” by researcher Gregory Elliehausen of George Washington University, “customers used the loans a small or moderate number of times during the past year, typically for less than a month at a time. Such use seems consistent with the intended purpose of payday loans as short-term borrowing to pay unexpected expenses or relieve temporary shortfalls in income.”

Finally, “few payday loan customers considered payday loans as a debt trap. Only about 3 percent of payday loan customers mentioned difficulty of getting out of debt as a reason for being dissatisfied or only partially satisfied with their most recent new payday loan.”

Have you noticed how rarely newspapers editoral writers quote solid, respectable scholarship in their rants?

That’s the erudite Tom Linafelt of QC Holdings in a letter to the Lawrence Journal World& News:

Short-term loan companies each year help thousands of Kansas families overcome unexpected financial circumstances, and Federal Reserve Bank studies show that, by extending credit where otherwise there would be none, short-term loans actually help household finances.

That’s CFSA spokesperson Steven Schlein telling it like it is to the Associated Press in this story out of Kansas:

There are no hard numbers on payday loans, because firms won’t release those figures, but they do acknowledge the increased interest in the products, even if the companies aren’t lending more money. Steven Schlein, spokesman for Community Financial Services Association, a trade group for the payday loan industry, said it will know more about the financial meltdown’s impact as time passes.

“Customers are trying to make smart decisions. They don’t want to bounce a rent or utility check,” Schlein said. “It’s usually a temporary thing where their paycheck isn’t matching up to their means.”

Yes, the customers know what they’re doing.  And they don’t want so-called “consumer groups” or legislators making their decisions for them.

The Wichita Eagle reports that Kansans paid an average $325 in overdraft protection fees last year.

Here’s the release with a link to the full report.  See how much overdraft protection the average citizen pays in your state.

A Kansas legislator is pushing it.  From the story: 

While working on consumer protection issues, state Rep. Melody McCray-Miller, D-Park City, said she frequently heard, “We need to be educating our young people about this so they won’t get into this situation.”

That situation could be anything from mounting credit card debt or payday loans that spiral out of control to people getting unaffordable mortgages or just not saving money.

“Bad debt is a drag, and we are seeing that firsthand nationally. Instead of being a debtor nation we need to be educated,” Miller said.

She is developing a proposal to ensure that Kansas children in kindergarten through 12th grade would learn personal financial literacy. Ideally, she would like to see a financial literacy component be required for graduation in the state, but she is still working out the details of the proposal.

The Lawrence Journal World derides the number of payday lending stores–six–in a downtown area.  However, the writer can’t fathom the economic law of supply and demand:

It amazes me that there is enough business to keep all of these companies going.

The writer should consider it good news that there are a number of stores competing with each, driving prices as low as they can go.

A Kansas appeals courts upholds a decision that Internet lenders must get state licenses.   From the story:

A Kansas law requiring Internet payday lenders to obtain a license to do business in the state does not unduly burden interstate commerce, a federal appeals court has ruled.Rejecting a constitutional challenge brought by Logan, Utah-based Quik Payday Inc., the 10th U.S. Circuit Court of Appeals on Friday held “that the burden of acquiring a license does not outweigh the benefit from that requirement.”

Here’s a line from a roundup column in the Wichita Eagle: 

Would you really be surprised if the city tore down the Wichita Boathouse and replaced it with a payday loan store?

The Payday Pundit is fairly hard to rattle so NO, we would not be surprised.   Frankly, we didn’t even know Wichita was near water.