The New York Times picks up an AP story. My favorite passage:

”There’s still high demand for our product but we won’t be able to feed it,” said Joe Brown, general counsel for the Check Masters chain. The new law ”will push people to other forms of short term credit, turn to sources that are not subject of regulations, such as online lenders that operate off shore.”

Brown said he expects the new law to hit smaller chains and mom and pop outlets — like Weaver’s — harder. He said the profit margin for the payday industry is not high, and smaller chains won’t be able to sustain a cut to their customer base.

Exactly.  Reduced competition has never benefited the consumer.

New law takes effect January 1.  From the story:

Washington’s new state laws to curb payday loan abuse are equally tough on both short-term borrowers and their high-interest lenders. Starting January 1, no one can take out a payday loan that totals more than $700 – or one-third of their gross monthly income – and lenders can check the borrower’s loan history on a statewide database. The maximum number of payday loans that legally can be issued per person in a 12-month period is eight.

PDLindustryblog looks at the start of the new state law.

From the story:

Lower Columbia CAP is gunning for the business of payday lenders — minus the high interest rates that cost consumers millions nationwide each year.

The area’s largest social-service agency is hoping to start a community bank that gives low-income people a low-interest lending option.

Data from a year-long pilot program indicates a need for more loan options for low-income residents, said Marcel Goulet, director of CAP’s Financial Independence Center.

This journalist is hyperventilating because she discovered you can get a payday loan with an unemployment check as a source of income.  Yes, payday lenders do not discriminate against customers based on their source of income.

From the Seattle Business Journal:

The number of payday lenders dropped slightly in Washington state last year but the total amount of money loaned grew a bit.

According to the Washington State Department of Financial Institutions (DFI), there were 133 licensed payday lenders with a total of 717 locations in the state last year, compared with 138 lenders and 729 locations in 2007. The lenders made fewer loans last year — 3.196 million — compared with 3.26 million made in 2007, but the total amount of loans rose to $1.31 billion last year from $1.29 billion in 2007.

In this story out of Washington State about a credit union alternative to payday lending, a chart shows the various terms of the loans.   Given their length and complexity,  none can be called a real “alternative.”

From CFSA’s Tommy Moore in the Columbian newspaper:

The payday advance industry exists because we offer our customers a product that is more desirable than the alternatives.

You just can’t say it any better than that.

Another editorial calling it “balanced.”   Upon examination, the Payday Pundit doesn’t like the eight loans per year limit in the bill.   It’s arbitrary and it’s a government intrusion into consumers’ decision making.

I wish reporters were more clear about the terms of these so-called payday loan “alternatives.”   From a story out of Seattle: 

Its short-term loans have 15 percent interest rates, but 5 percent of that goes into the client’s savings account upon repayment. The loans can be paid off in 90 days, rather than the two weeks required by many payday-loan stores. Payday loans, by contrast, have interest rates as high as 390 percent.

If it’s a 90 day loan and has monthly payments (not clear) than it’s an installment loan, not a payday loan alternative.