And again we ask, how is this different from what CFSA says? We have always promoted responsible use of the payday advance product, and even go as far to say in the Your Guide brochure handed out at our Member Company stores (both in English and Spanish): “Never use payday advances as a long-term solution for financial challenges.” Continued from the Las Vegas Review Journal story just posted:

“This is an expensive form of credit that is designed to be a short-term loan,” Messick said. “We don’t want them to use this to try and solve their long-term financial situation.”

Comes from a spokesperson from a CFSA Member Company, when commenting on banks entering into the payday loan arena, featured in this Las Vegas Review Journal article.

“There is a growing need for access to short-term credit,” said Jaime Fulmer, an Advance America spokesman. “Credit unions and banks offering short-term loans is a reflection of consumer demand.”

Truth is, though, that they’ve been offering direct deposit advances for quite some time (and Wells Fargo isn’t the only one).

“We have been offering these loans for a while,” said Richele Messick, a Wells Fargo spokeswoman. “To be eligible, you have to be an established Wells Fargo checking customer with recurring direct deposit or a tax refund.”

The industry contributed over $42 million to Montana’s gross state product (GSP) in 2007.  The payday lending industry supports over 700 jobs in Montana, including 369 people directly employed in 113 storefront locations.

• The industry indirectly created another 136 jobs in supplier industries.
• Payday loan store and supplier industry employees induced the creation of 227 jobs through the purchase of goods and services using earned wages.

• In Montana, the total labor income impact from the payday loan industry is $26 million:
  • Through direct employment, payday loan stores contributed $13.3 million in labor income.
  • Suppliers to the payday lending industry contributed $4.9 million in labor income as an indirect result of the revenues generated by the payday loan industry. 
  • $7.7 million was generated from the wages of payday loan store employees and supplier industries’ employees as they were spent in Montana’s economy. 
• The payday lending industry helped to generate $11.3 million in federal, state and local taxes in 2007.

From a story out of Nevada:

Bill Burnbaugh, 62, owner of Capitol City Loans at 5951 Highway 50 East in Carson City, says he’d have a lot more business if he didn’t have to compete with payday lenders, but changing your business model is part of running any successful business.

I’m lost.  From the story: 

Pawn shops in Reno are like teenage girls at a Justin Beiber concert: everywhere.

The Las Vegas Sun loves the financial reform bill for this reason:

We face a situation of soaring layoffs caused by the recession and many Americans unable to make mortgage and personal debt payments — with Las Vegas and Nevada generally leading the nation in these areas with our record unemployment, foreclosure and bankruptcy rates.

The Consumer Financial Protection Bureau (or Agency) will not help with any of these problems.

From Credit Union Times:

The $804 million Nevada Federal Credit Union, headquartered in Las Vegas, has apparently written its last payday loan.

A call to the credit union confirmed that the Nevada stopped offering the loans as of Thursday, Oct. 15 and any mention of the controversial short term loans had disappeared from its Web site.

Nevada Federal had been offering a loan called AdvancePay, which charged an application fee up front whether a borrower got the loan or not.  The credit union had defended the loans by arguing they were less expensive for members than other payday advance loans offered by other firms, but an NCUA letter to credit unions made it clear the regulator took a dim view of the lending.

They had the option of cutting the rate, but decided not to offer it instead.

A pawn shop in Nevada opposes competition.

That’s how much the Nevada Federal Credit Union charges for its payday loan “alternative.”  From the article:

In the first seven months of this year, the credit union has issued 12,000 loans, amounting to about $8 million, an estimate based on borrowers taking out the maximum loan of $700. A single payday loan costs $60 regardless of whether the loan is for $100 or $700. Also, note that the $60 is an application fee, and doesn’t guarantee that an applicant will get the loan.

You would think that Nevada Federal was just rolling in the dough, charging people a relatively high fee for a small amount of cash for an even smaller period of time — not to mention the ones who were turned down.

Not so, Beal said. There is a fair amount of risk involved in the payday loan “alternative” and the fees offset the losses, and it costs the credit union $55 to service the loan, he said.

Some people haven’t repaid their loans, and if the credit union isn’t able to collect within a few weeks, it writes it off as a loss.

This year, Nevada Federal has already lost $75,000 from defaults.

That’s how much the Nevada Federal Credit Union charges for its payday loan “alternative.”  From the article:

In the first seven months of this year, the credit union has issued 12,000 loans, amounting to about $8 million, an estimate based on borrowers taking out the maximum loan of $700. A single payday loan costs $60 regardless of whether the loan is for $100 or $700. Also, note that the $60 is an application fee, and doesn’t guarantee that an applicant will get the loan.

You would think that Nevada Federal was just rolling in the dough, charging people a relatively high fee for a small amount of cash for an even smaller period of time — not to mention the ones who were turned down.

Not so, Beal said. There is a fair amount of risk involved in the payday loan “alternative” and the fees offset the losses, and it costs the credit union $55 to service the loan, he said.

Some people haven’t repaid their loans, and if the credit union isn’t able to collect within a few weeks, it writes it off as a loss.

This year, Nevada Federal has already lost $75,000 from defaults.