Local governments who restrict legal businesses through zoning confuses The Pundit. This time a village in Michigan is trying to stop its citizens from using short-term credit services.

Zoning board officials said they do not want such businesses to become too prominent, and would like to see more variety in the types of companies in the village.

A Detroit News columnist rails at banks.  From the story:

CFSA’s witty and erudite spokesperson, Steven Schlein, makes the case for payday loans in Michigan’s Herald Palladium:

Schlein, of the industry lobbying organization, argues that for loans under $700, payday loan fees are more economical than risking overdraft fees, which can be as high as 10,000 percent. Schlein said customers take out payday loans to avoid overdrafts. “Our customers are extremely satisfied with the product,” he said.

CFSA’s Steven Schlein had this to say about Fifth Third Bank’s payday loan alternative: 

A spokesman for the payday lending industry association says it welcomes the competition.

“We always believe that we can compete with anybody,” said Steven Schlein, a spokesperson for the Community Financial Services Association of America, which represents 22,000 payday stores nationwide. “The bank products have rarely ever proven to be less expensive or more convenient for our customers.”

They give everyone a bad name.   This is a story about an online lending company that appears to be set up to commit fraud.    If anyone from this company–500FastCash.com–has a response, we’d be happy to post it here.

A credit union opens in a rough neighborhood of Detroit and the risk pays off:

Eight months after opening its first branch office in the home of the groundbreaking Model T plant, the Communicating Arts Credit Union is proving that businesses can thrive in one of the nation’s most economically depressed cities.

Since entering Highland Park in April and broadening its membership criteria, the 73-year-old credit union, which caters to low- and moderate-income individuals, has gained about 800 members at its new location.

That’s up from the 691 new members it attracted during all of last year.

The branch — at the Shops at Woodward Place, across from the dilapidated Model T plant — has garnered $400,000 in new deposits and made about $619,000 in loans, exceeding the credit union’s expectations.

Western Michigan University is hosting an “ethics bowl.”   Here’s one of the agenda items:

• What would be the most effective and morally justifiable strategy for church and community groups to pursue to reduce the harms brought by payday-loan businesses?

How about letting citizens make their own financial choices?

I don’t think we’re talking about two states here.  There’s a town in Michigan called Wyoming that feels it has too many payday lenders.  They want to spread them out according to this story: 

Wyoming has so many roadside signs and shops advertising it that the city’s Downtown Development Authority is exploring regulations to limit the so-called “payday” lenders on 28th Street SW. A possible rule of thumb would require stores be no closer than 500 or 1,000 feet.

There are eight state-licensed cash stores on 28th Street SW in Wyoming, and five are in the half-mile between Michael and Clyde Park avenues.

“It’s not so much the use (that’s a problem); it’s the connotation of having them so densely situated in any one particular area,” said Douglas Kochneff, DDA chairman and owner of Action Tire Center at 841 28th St. SW, next to Instant Cash Advance.

There must be a great need in Wyoming, Michigan if there are so many stores. 

Goes to Susan Tompor at the Detroit Free Press.   Below are some statements she makes in her piece with the Payday Pundit’s comments in bold:

Debt traps — including high-cost advances on a paycheck — are crushing many Michigan consumers.

PP:   She provides absolutely NO evidence of this, not even the usual anecdotal nonsense we’ve come to expect.

As many consumers scramble to pay bills, it’s wise to pay attention to just how costly quick-fix loans can be compared with other credit.

PP:  She makes NO comparisons to other credit.

This fair-minded and articulate news article on WLUC in Upper Michigan makes a great point:

Payday loan institutions can also mean good news for those with damaged credit. Not only is it easier to get approved for a smaller loan, but most cash advance agencies can actually help you re-establish credit. Many locations offer rechargable credit cards endorsed by major companies and will also provide letters of recommendation for customers in good standing who are looking to make larger purchases outside the scope of payday lenders.

The Payday Pundit is glad to see some reporters taking the time to learn about the payday loan service and writing sensible articles.