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.
Tennessee banks offering payday loans
April 7, 2009 | Tennessee, alternatives, industry | Comments (0)The Nashville Business Journal looks at payday loan products being offered by Fifth Thirds and US Bank.
The fee is $1 per $10 advanced. The advance is paid automatically from the customer checking account when the next direct deposit hits the account, making the loan term anywhere from 1 to 35 days. The APR varies greatly based on the loan term, ranging anywhere from 104% to 3,650% APR. To actually receive a 120% APR loan, the APR quoted on the site, the loan term would fall between 30 and 31 days.
The bank takes on little, if any risk, by offering these loans, because they have direct access to the customer checking account the moment the direct deposit comes in to the account.
The Memphis blues
January 28, 2009 | Tennessee, industry, local issues, regulation, states | Comments (0)The Memphis city council passed a zoning ordinance on title and payday lenders.
“Ridiculous”
January 17, 2009 | Tennessee, industry, media coverage, regulation, states | Comments (0)That’s a quote from Steven Schlein, spokesperson for the Community Financial Services Association of America, in response to the notion that payday lending causes bankruptcy. From the story in the The Tennessean:
Tennessee routinely ranks near the top nationally in terms of the number of bankruptcy filings per capita, but there is disagreement among other economists over whether payday loans lead to bankruptcy.
Brian Melzer, a senior lecturer at the Kellogg School of Management at Northwestern University, found that access to payday loans among people making between $15,000 and $50,000 in income increases the difficulty of paying bills by 25 percent compared with those who didn’t have payday lenders nearby.
However, Donald Morgan, a researcher with the Federal Reserve Bank of New York, and Michael Strain found that households in Georgia and North Carolina, which have effectively banned payday loans, bounced more checks and filed for Chapter 7 bankruptcy at a higher rate than households in states that did have access to the industry.
The industry argument is that payday lenders provide a cheaper short-term solution than the alternatives — high overdraft fees from banks that can average $27, or excessive late payments from credit card companies and utilities.
With overdraft, “people are paying $27 to borrow $36, versus a customer who comes in and borrows $100 from us, they pay $17.65,” said Check ‘N Go spokesman Jeff Kursman. “What’s a better bargain?”
Steven Schlein, a spokesman for industry group the Community Financial Services Association, said there is no correlation between payday lenders and bankruptcy. “To say one or the other caused bankruptcy is absolutely ridiculous,” he said.
It’s more likely that some people heading toward bankruptcy try to fend it off by taking out payday loans but only postpone the inevitable.
Maybe we’ll ask a fortune teller
December 27, 2008 | Tennessee, industry, media coverage, states | Comments (0)About the the fate of payday lenders in Memphis and Shelby County.
The Memphis blues again
December 9, 2008 | Tennessee, industry, media coverage, regulation, states | Comments (0)Now there’s a joint county-city effort to regulated payday lending. From today’s Commercial Appeal:
The Shelby County Commission on Monday changed a proposed law that limits where payday and title loan businesses can be built in the county, specifying that these establishments cannot be within a quarter mile of residential districts.
The proposed law — which commissioners then approved on the second of three readings and the Memphis City Council adopted on third and final reading last week — also specifies that these businesses cannot be within 1,000 feet of each other and require a special-use permit if business owners want to locate in zones other than industrial.
