Quote of the Day
June 21, 2010 | Tennessee, alternatives, federal legislation, industry | Comments (0)From a story about payday lending/financial reform in the Chattanooga Times Free Press:
“You don’t sell salmon for $14,000 a ton; you sell it for $7 a pound,” Mr. {Allan} Jones said.
Old meme won’t die
April 15, 2010 | Tennessee, customers, industry | Comments (0)From the Tennessean
At least two or three times a week, a customer walks into an Advance Financial store in Middle Tennessee wanting to use a state unemployment check as proof of income to take out a payday loan.
Of course, federal law says lenders can’t discriminate on the basis of income.
At the risk of being redundant
March 31, 2010 | Tennessee, alternatives, customers, industry | Comments (0)Payday loan customers are banked! From this frustrating story:
Memphis Mayor A C Wharton Jr. gathered about two dozen bankers and finance professionals in his seventh-floor conference room at City Hall Wednesday to launch an ambitious financial literacy campaign.
Dubbed “Bank on Memphis,” its goal is to bring into the financial mainstream tens of thousands of Memphians whose paycheck-to-paycheck existence makes them more familiar with high-interest payday loans than no-fee checking accounts.
Tennessee action today
March 23, 2010 | Tennessee, industry, research | Comments (0)Haven’t heard much about this, but we’ll keep an eye on it. From the story:
Today, legislators in the Tennessee House Utilities and Banking subcommittee will have the chance to stand up for working men and women in Tennessee by saying 100 percent APR is enough for predatory payday lenders.
A 100% APR equals a $3.84 fee. In other words, it’s a ban.
Educating the media
March 17, 2010 | Tennessee, customers, industry, regulation | Comments (0)From Check into Cash’s Ryan Harris in today’s’ Chattanooga Times:
The Times showed a lack of understanding about the payday lending industry in its recent editorial (“The financial reform test,” Saturday, March 13).
Tennessee law does not allow payday lenders to charge one cent of interest and also does not allow loan rollovers. In fact, Tennessee has such a strong regulatory structure for payday lending that its laws have been copied by other states.
Payday lending is the most transparent financial product on the market with simple, one-time fees that are capped at $30 in Tennessee. These short-term loans cannot fairly be judged on an annual interest rate. In Tennessee, the cost of a payday loan is between $15 and $17 per $100 borrowed and the loans cannot be rolled over at additional costs. State law also limits the amount of payday loans to $300.
There are only so many things one story can get wrong.
Yea, so
March 11, 2010 | Tennessee, industry, media coverage | Comments (0)The media continues to be surprised that the industry is working hard to protect its customers, employees and shareholders.
Can I get a definition?
March 1, 2010 | Tennessee | Comments (0)An editorial in Memphis’s Commercial Appeal categorizes some state representatives:
Consumer-minded legislators have tried for years to rein in payday loan and auto title pledge loan purveyors and the like.
Since when did restricting consumer credit access make one “consumer-minded?”
Doesn’t make sense to restrict credit
November 7, 2009 | Tennessee, industry, regulation | Comments (0)A store manager writes a compelling letter to a Tennessee newspaper:
In addition to serving as a resource for temporary credit, the industry contributes to the local economy – providing jobs that include health benefits and competitive wages, hiring local vendors, renting storefronts and using other local services.
For the sake of its citizens and sustained economic development, you would think it would be more beneficial for a city to keep their successful businesses open, rather than trying to zone them out of existence. A zoning ordinance will send the wrong signal to the business community – generating fear of being shut down by further regulations.
“More than a simple payday advance company”
May 11, 2009 | Tennessee, customers, industry, media coverage, positive media coverage | Comments (1)Must read of the day. Great profile of a family-owned payday lending company in Tennessee:
The Hodges — both Middle Tennessee natives — founded their company in 1996 as Advance Payday. For the first 10 years of its existence, the business was difficult to differentiate from the crowd. It offered payday advances like so many others in its market and in environs not drastically different from its competitors.
In 2006, the couple made the decision to expand Advance’s menu and become “more than a simple payday advance company” and set itself apart from the rabble by getting closer to its communities. They formed focus groups to determine what its customers were looking for both in terms of service and products.
From the groups, Advance learned that most customers of this sort of financial services company were forced to “ping pong” from vendor to vendor looking for other products. As with Advance Payday, most players in the space specialize in a specific product. TitleMax, for example is primarily focused on providing short-term loans against the value of the customer’s car.
The industry lacked a one-stop shop.
With this in mind, the Hodges changed the name of their company to Advance Financial, expanded its hours, drastically redesigned their point-of-sale system, expanded product offerings and remodeled all of their stores, a process now nearing completion.
“We wanted to have the look and feel of any other place you would go to do business,” said Tina Hodges.
The company now offers more than a dozen services from payday advances to bill payment services, pre-paid local phone service, tax-preparation and tax-refund loans, as well as auto insurance.
Something’s going on in Tennessee
April 18, 2009 | Tennessee, industry, regulation | Comments (0)But we can’t figure out whether it’s good or bad. From the story:
Under current state law, title loans are 30-day borrowings that roll over automatically into a new loan if the principal is not paid off within 30 days. Those lenders are allowed by state law to charge 2 percent interest and an administrative fee that’s no more than 20 percent of the principal indebtedness for each loan, Brewer said.
“So that’s 22 percent. And if it was a $1,000 loan, then that would be $220 deducted from the loan right at the beginning,” Brewer said. “So a person would then receive $780, and then if they can’t pay back $1,000 within 30 days, the fees and interest would accrue all over again.”
The bill before the state Legislature would nix the ability of title lenders to add the administrative fee onto the loan each time it’s rolled over.
“What this bill would do is it would allow the 2 percent interest per month, it wouldn’t change that,” Brewer said. “It would allow a 20 percent administrative fee on the front end when the loan is made, but then on the automatic renewals it would permit only 2 percent interest – no more administrative fee.
