NAACP payday lending event tonight in Dayton
April 28, 2008 | Ohio, industry, regulation, states | Comments (0)The NAACP is holding a meeting on payday lending tonight in at the Trinity Presbyterian Church, 3211 Lakeview Ave. in Dayton at 6:45 p.M. It’s open to the public. If you live in Dayton and support the industry, the Payday Pundit urges you to attend the meeting and make your voice heard.
Ohio update:
April 26, 2008 | Columbus Dispatch, Ohio, industry, media coverage, regulation, states | Comments (0)Saturday’s Columbus Dispatch sums up the state of play in Ohio. Here’s the meat of the article regarding the status of legislation:
Three payday-lending bills have been debated in Widener’s committee for months. He took some parts of those bills and added new wording that doesn’t change the current annual interest rate of 391 percent ($15 per $100 borrowed on a two-week loan), but lets customers extend any two-week loan by at least 60 days.
The bill would limit borrowers to holding no more than two payday loans at once, does not allow borrowers to have more than $500 total in such loans, and requires a financial-literacy class for anyone who wants to take out three loans in 90 days.
Ohio’s governor wants to ban payday loans
April 25, 2008 | Middletown Journal, Ohio, industry, media coverage, regulation, states | Comments (1)The governor, Ted Strickland, indicates his support for a 36 % rate cap in a letter to Ohio Coalition for Responsible Lending.
If I could, I would ask the Governer to explain how taking a credit option away from consumers helps them.
Is the Center for Responsible Lending being hypocritical?
April 25, 2008 | Center for Responsible Lending, industry critics | Comments (0)Ohio’s Buckeye Institute asks, Is the Center for Responsible Lending being Hypocritical? They write:
”…there is research indicating that CRL is being funded by organizations that have business practices are not much different than those being used by payday lenders. While CRL’s research should be examined on its own merits (and it has been found lacking when examined by many economists, such as Dr. Tom Lehman), media members and legislators should question the consistency of CRL accepting funding from organizations that use the very practices it decries.
CRL is largely funded by the Center for Community Self-Help, which encompasses a variety of organizations, such as a venture capital firm and a credit union. These organizations cater to low-income Americans but often use the same tactics that CRL attacks when others do it. The Consumers Rights League recently completed a report that outlines some of the actions taken by organizations under the banner of the Center for Community Self-Help that are attacked by CRL when done by other organizations:
Aggressive debt collection As the Consumers Rights League report puts it, “Records show that Self-Help organizations have taken foreclosure or eviction steps against its low-income customers for as little as $62,332 in 2005 and $50,768 against another in 2002. And despite CRL’s public advocacy on behalf of small borrowers, Self-Help’s record includes lawsuits against countless small-dollar borrowers, including suits for as little as $96.”
Profiting from subprime mortgages Although the CRL attacks subprime lending, it has no qualms about taking funds from organizations that profit from it. As Business Week reported, “Paulson & Co., [a hedge fund] which has seen its assets under management soar this year through fortuitous bets in the subprime market, has given $15 million to the Center for Responsible Lending, a Washington nonprofit that has been lobbying on Capitol Hill for passage of bankruptcy legislation.”
Making large profits of loans to the poor As the Consumers Rights League notes, “Self-Help pays typically between zero and four percent interest on the loans it obtains, many of which come from government-supported entities…. But Self-Help charges interest far above the charitable rates at which it borrows. In 1998, the last year it reported interest rates on its publicly disclosed federal tax form, the Self Help Venture Fund reported that their average interest rate was more than 10 percent. For reference, that is approximately three percentage points higher than the average home mortgage rate in 1998, according to HSH Associates Financial Publishers. That adds up to a nearly 40 percent premium over the average rate. The Ventures Fund made other loans at interest rates as high as 13 percent.”
There is nothing inherently wrong with the Center for Community Self-Help aggressively pursuing debtors, taking contributions from businesses that profit from subprime mortgages, or making a profit on loans to the poor. But when its advocacy arm, the Center for Responsible Lending, attacks these same practices when other organizations do them, it calls its credibility into question.
Payday Pundit says, “Amen to this.”
Cleveland’s Bob Franz Show Discusses Payday Lending
April 25, 2008 | Ohio, best practices, industry, positive media coverage, states | Comments (0)Finally! Someone who “gets” it.
From this morning’s Bob Franz show on WTAM 1100…
“As long as you are up front and you tell people, you said you’ve got poster size, not fine print, in fact its great big bold faced, poster sized listings of your fees up front, anybody who walks in there knows full well what they are going to be charged. If they choose to sign on the dotted line and they agree to those terms, then why should the government be getting in the way at all? Why should they be trying to regulate how much you guys can make, regulate what interest you charge regulate any of your fees or anything else? If they are spelled out and people choose to do it anyway, I don’t understand how they can blame Checksmart or any of the others.”
Referencing CFSA’s mandated extended payment plan, Franz says, “Am I the only one that finds that extraordinarily generous?”
Franz speaks to a rep of the Community Financial Services Association, customers that have used the service and an employee of the industry.
Listen to the program at http://www.wtam.com/pages/bobfrantz/ondemand/. In the first hour, payday lending coverage starts 18 minutes and 30 seconds in. In the second hour, coverage starts 9 minutes 15 seconds in.
Payday Pundit Ponders: “What is responsible lending?”
April 25, 2008 | industry | Comments (0)
With all the talk about “responsbible lending” by the newsmedia, policymakers and consumer groups, the Payday Pundit wants your opinion.
What exactly is “responsible lending”? How do you define it?
We want to hear from you. Email the Pundit at
Send lawyers, guns & money
April 25, 2008 | Virginia, industry, local issues, regulation, states | Comments (0)Funny blurb from the local Alexandria, Virginia newspaper:
“All lenders don’t treat everybody the same,” said former City Councilman Lonnie Rich, representing LoanMax before the elected officials. “Everybody can’t walk down to Burke and Herbert to get a loan.”
Xenia, OH city council did it
April 25, 2008 | Dayton Daily News, Ohio, industry, local issues, media coverage, regulation, states | Comments (1)They put restrictions on check cashing and payday loan stores. Here’s the update in the Dayton Daily News.
Update: South Carolina
April 25, 2008 | Greenville News, South Carolina, industry, media coverage, regulation, states | Comments (0)This editorial in the Greenville, SC newspaper sums up the state of play on payday lending legislation in the state. The Payday Pundit doesn’t now enough about the legislation to comment intelligently on it, but I’m struck by the fact that the editorial used the word ”reasonable” twice in referring to restrictions.
Do editorial writers really know enough about finance, economics and lending to know what’s “reasonable?” The word “reasonable” is often invoked by debators to make whatever they say sound less extreme.
Lender in Illinois gets hit by Chicago Tribune
April 25, 2008 | Chicago Tribune, Illinois, alternatives, industry, media coverage, states | Comments (0)A lending company called AmeriCash is criticized by consumer groups in this Chicago Tribune article for steering costumers into longer-term consumer loans instead of payday loans.
The Payday Pundit knows nothing about AmeriCash, but I think this article proves that there’s no winning with consumer groups.
