Oregonians turning to internet lenders
July 6, 2008 | Oregon, media coverage | Comments (0)Who could have predicted that?
Sorry for the Sunday morning sarcasm, but this story has got the Payday Pundit riled up:
The number of stores dropped to 329 by the time new regulations went into effect July 1, 2007, and have since dropped to 81. Car title lenders, which also made small, high-interest loans using car titles as collateral, have all but disappeared in Oregon.
Hanson says the decline cost about 800 jobs in the payday loan industry and leaves Oregonians with fewer options when they get in a pinch and need a quick small loan to repair a car, prevent a utility shutoff or handle some other immediate need.
“Everything’s gone, they’re shut down….”
June 12, 2008 | Oregon | Comments (0)That’s from an ad from Jeff Merkley’s Senate campaign. He’s actually bragging that as Speaker of the Oregon House he helped drive payday lenders out of the state. Unbelievable.
Wisdom on payday lending from Oregon’s Cascade Institute
May 8, 2008 | Oregon, Statesman Journal (OR), industry, media coverage, positive media coverage, regulation, states | Comments (0)This piece in Oregon’s Stateman Journal on poverty is a must read. Author Bina Patel examines the issue of wealth creation and the relationship between government policy and poverty. Money quote:
Closing payday lending businesses, intended to protect the poor from entrapment in cycles of debt, eliminates their last possible form of available credit, leaving many struggling to handle unexpected crises.
Wallet Pop: Payday Lending Part II
April 30, 2008 | Oregon, industry, regulation, states | Comments (2)Wallet Pop’s newest post details the state of the industry today.
He notes that in Oregon, a 36% annual cap was put on the payday lending industry, and 80% of the stores closed up and went out of business.
Payday Pundit especially likes the first comment posted in response, “I enjoy seeing states tighten credit in the middle of a credit crisis – it reinforces my view that politicians have no clue what they’re doing.”
Update: thanks to a reader for pointing out that “In Oregon it’s a 36% annual rate cap plus a $10-per-$100-borrowed loan origination fee. If it was just a 36% annual cap, like they’re proposing in Ohio, 100% of the payday loan stores would have closed.”
Oregon’s Merkley is “strenthening” the economy (by taking jobs away)
April 30, 2008 | Jeff Merkley, Oregon, industry critics, states | Comments (0)Jeff Merkley, Oregon legislator and candidate for U.S., is most famous for leading the charge to drive payday lending out of the state. He seems most proud of it as evidenced by this flyer sent out by the AFL-CIO in support of his candidacy. The Payday Pundit calls readers attention to the typos in the flyer and hopes that Merkley is not positioning himself as the “education candidate.”
Last month, Merkley did the opposite of “strenghening” the economy and actually held an event where he celebrated lost jobs in Oregon.
Oregon’s House Speaker “celebrates” lost jobs and the taking away of credit choices
March 28, 2008 | Jeff Merkley, Oregon, industry, industry critics, regulation, states | Comments (0)
In a stunt to gain publicity, House Speaker Jeff Merkley toasted the closing of payday loan stores in Oregon.
As seen in other states where payday lenders have been forced to close their doors, Oregonians will now spend more money bouncing checks, using overdraft protection, and paying bills late.
Congrats Speaker Merkley. While you are toasting the closing of legal, regulated, tax-paying Oregon business, hard-working Oregonians are left without a credit option and forced to choose between other, more costly short-term credit options they had previously tried to avoid.
Speaker Merkley, while you’ve eliminated a credit option, the need is still there. You’ll have to answer to the consumers whose credit choices you’ve limited and the employees whose jobs you’ve taken away.
Seattle P-I picks up Check into Cash story
March 11, 2008 | Oregon, Seattle Post-Intelligencer, industry, media coverage, regulation, states | Comments (0)Nice to see a consumer blogger playing it straight. This Seattle Post Intelligencer blogger picks up Check into Cash’s announcement with no commentary. It’s also picked up by BizJournals. Maybe politicians will get the message that a 36% rate cap IS A BAN.
Check into Cash closes doors in Oregon
March 11, 2008 | Oregon, alternatives, employees, industry, states | Comments (0)Check into Cash, a CFSA member company and one of the nation’s largest payday advance companies, has announced that they have closed their remaining 13 stores in Oregon. Their action comes one year after the Oregon legislature passed a law imposing a 36% APR cap on payday loans.
Allan Jones, Check into Cash CEO, explained that many stores closed when the legislature passed the 36% APR cap. No longer able to offer payday loans, they tried to meet customer needs by offering check cashing services and a new loan product. “These new products were not popular with consumers, nor profitable for the company,” said Jones.
Also from the release:
“With the closing of our remaining stores, Oregon citizens will no longer have access to short-term credit and will be forced into costly products such as overdraft protection and bounced check fees.”
“We tried to work within the constraints of the law, but lost money each and every month we tried to operate there under the new rules. We have proven that it cannot be done.”
“We are saddened that we have been forced to close our stores, putting our employees out of work and leaving our customers without a service they appreciated.”
“As we warned the legislators in Oregon, payday lending cannot be offered under a 36% rate cap. An annual percentage rate of 36% applied to a two-week loan amounts to less than a dime a day on a $100 two-week loan. That cut us from $15 to $1.38 for the two-week transaction. The legislators seem fixed on the APR of 391% as being bad, when in reality, it amounted to $15.”
Mr. Jones said it best when he stated, “The legislators will now have to answer to the tens of thousands of consumers whose credit choices are now limited because this type of micro-lending has been abolished, forcing consumers to more expensive options where no APR disclosure is required, such as overdrafts.”
Labor Dept report: 63,000 jobs lost in February
March 11, 2008 | Oregon, Pennsylvania, employees, industry, states | Comments (0)According to the latest Department of Labor numbers, 63,000 jobs were lost in February, with the financial services industry being one of the industries hit hardest.
While some industries, like construction, were victims of a market slowdown, payday lending employees were victims of over-regulation.
In states like Oregon and Pennsylvania, the payday lending industry has been virtually regulated out of business, leading to the loss of thousands of jobs (with health care, paid time off, and retirement benefits). Not to mention the elimination of a popular and regulated credit option for consumers.
Seems like we should be creating new jobs and providing access to credit, not taking both away.
