Peoria City Council enacts moratorium on payday lenders
June 25, 2008 | Illinois | Comments (0)No new stores for 180 days. The PJ Star has the details. From the piece:
During the moratorium, city staff members will develop an ordinance aimed at regulating the stores within city limits. An ordinance is expected to be drafted by November.
“This moratorium is not intended . . . to regulate the business practices, but rather to regulate the number of locations of these entities,” said 2nd District Councilwoman Barbara Van Auken, who proposed the moratorium after being contacted by concerned constituents about the industry’s growth in Peoria.
Brutal
June 24, 2008 | Uncategorized | Comments (0)This cartoon is paydayfacts.org’s hardest hitting yet.
“Does Money Make You Happy?”
June 24, 2008 | alternatives, customers, research | Comments (0)This provocative Christian Science Monitor story examines the question. From the piece:
In a 1978 study, two psychologists interviewed 22 major lottery winners and found that the joy of sudden wealth wore off in a few months. They had a harder time than others enjoying life’s prosaic pleasures: watching television, shopping, talking with friends, and so forth.
The reason for this phenomenon is that humans tend to adapt psychologically to their circumstances – including their monetary ones – quickly. Economists call this the “hedonic treadmill.”
One study shows that people report needing 40 percent more to reach a level they consider sufficient. If you earn $50,000 per year, you’ll “need” $70,000. But if you get a raise and make $70,000, you’ll soon “need” about $98,000. The more you have, the more you find you need.
The Payday Pundit likes that old joke: Money can’t buy you happiness, but it can buy everything else you need.
Alabamans are “stupid”
June 24, 2008 | Alabama, media coverage | Comments (1)At least according to one reader of the Aniston Star story posted below. Paydayfacts.org has some sarcastic commentary on it. The Payday Pundit thinks its funny that even in Aniston, Alabama there are elitists who think people are stupid for not making the same decisions they do.
Peoria Pundit misses mark
June 24, 2008 | Illinois, local issues | Comments (0)Where oh where to begin on the many misguided statements and flaws in the Peoria Pundit’s analysis of payday loans? It would appear that typical foundationless dislike and a lack of any real understanding of the payday loan product motivated Mr. Dennis.
Our fellow blogger has one interesting thought though:
Regulating financial institutions isn’t a legitimate function of city government. Peoria needs to concentrate its limited resources to things that are essential city services.
Thoughts on Ohio referendum
June 24, 2008 | Ohio | Comments (3)From State News Shot, blog of the Republican State Leadership Committee:
An interesting strategy indeed – direct democracy.
“Free checking” explained
June 24, 2008 | alternatives | Comments (0)From Zac Bissonnette at Wallet Pop:
Consumer complaints aside, high and rising overdraft fees are probably a fact of life. They’re a large enough chunk of revenue that they effectively subsidize other services like “free checking.” A bank that decided to buck the trend and reduce overdraft fees would have to raise other fees — not a policy that would win over high quality customers who are likely to use the bank for home loans, because people who are overdrawing with frequency are not likely to be valuable customers for anything except overdraft fees. Sad, but true.
Hearing today in Social Security Subcommittee of U.S. House
June 24, 2008 | industry | Comments (0)Here’s the description: Hearing on Protecting Social Security Beneficiaries from Predatory Lending and Other Harmful Financial Institution Practices.
Click here for the full witness list.
The payday lending industry is not testifying, but we will monitor the hearing and report back in this space of any relevant issues to our readers.
Title loans, payday loans…hey, they’re all the same
June 24, 2008 | Illinois, industry | Comments (0)Now we now why the Peoria city council is so confused. Because stories like this portray title loans and payday lending as pretty much the same.
Illinois state law regulates the maximum fee payday and title loan businesses can assess a borrower ($15.50 per $100 borrowed) and how much can be loaned to someone ($1,000 or 25 percent of gross monthly income). The $15.50 maximum charge equals about a 400 percent APR, which is far more than the 18 percent average credit card rate charged to borrowers, said Susan Hofer, spokeswoman with the Illinois Department of Financial and Professional Regulation.
“There are as many short-term lending stores as there are McDonald’s in Illinois,” she said.
Industry supporters, however, believe the payday and title loan businesses serve an important service for customers who want to avoid expensive credit card late fees, bounced check expenses and other costs associated with being unable to pay a bill.
Lyndsey Medsker, spokeswoman with the Community Financial Services Association of America, said the $15 fee charged to a borrower on $100 is a much more attractive cost compared to a $39 credit card late charge or a $29 bounced check cost.
The always erudite and articulate Lyndsey Medsker doesn’t speak for the title lending industry, only CFSA, the association of responsible payday lenders. The Payday Pundit thinks the paper should have distinguished more between the industries and asked a title loan spokersperson to comment.
The great fee controversy
June 24, 2008 | alternatives | Comments (0)Looks like USA Today’s bank fees story is getting under somone’s skin. The American Bankers Association responded with an oped in yesterday’s paper.
