Worst offenders raise fees the most
November 21, 2008 | alternatives, industry, personal finance | Comments (0)Kiplinger has a great summary of the bank fee increase trend.
Ohio banks can’t offer loans cheaper
November 21, 2008 | Ohio, industry, media coverage, states | Comments (0)This Business First paper is subscription only, but we’ve capture the heart of it here:
Many payday lenders have begun closing their stores and leaving the state, but others are seeking licenses under the Ohio Small Loan Act and the Ohio Mortgage Loan Act that allow them to charge APRs that can reach 223 percent on a two-week $200 loan.
Because these other provisions exist, it is unlikely traditional financial institutions will offer payday lending alternatives with an interest rate even close to what consumer advocates were hoping for when they pushed H.B. 545, said Marc Kilmer, a policy analyst at the Buckeye Institute for Public Policy Solutions, a conservative think tank in Columbus that was critical of the legislation.
Retailers at odds with credit card companies
November 21, 2008 | alternatives, industry, personal finance | Comments (0)This story details how retailers need consumers to have access to credit while card companies are cracking down:
“From the retailers’ point of view, the more people who open up cards, the better it is for sales,” said Laura Nishikawa, an analyst with Innovest Strategic Value Advisors.
But in the midst of the economic downturn, banks are working hard to protect themselves against defaults from existing cardholders, not to mention weeding out consumers with bad credit and maxed out accounts who seek new cards.
“As a bank right now, you’re afraid you’re picking up the bad apples,” Nishikawa added. “That’s one of the reasons a lot of the banks are tightening their standards.”
Our limey friends have an opinion, too
November 21, 2008 | industry, international, media coverage | Comments (1)The British magazine, The Economist, has been following the payday lending wars in the U.S.
But opponents said the Ohio law wouldn’t cost jobs
November 20, 2008 | Ohio, customers, employees, industry, states | Comments (0)Check Into Cash, one of the nation’s leading payday lenders, just made this announcement:
Payday lender Check Into Cash announced today that it is closing 32 of its 92 stores in Ohio. The closings follow recently passed legislation that caps interest rates at 28 percent, making it impossible for the company to continue current operations.
The 60 stores that remain open are offering micro loans under the Ohio Small Loan Act. “We’re making an effort to continue serving our customers,” said Check Into Cash President Steve Scoggins. “While the federal government understands the importance of providing access to credit as it’s doing with the bailout,” notes Scoggins, “Ohio legislators insisted on eliminating credit access for its citizens. In addition, this is putting thousands out of work during a serious economic crisis.”
We couldn’t say it any better.
November 20, 2008 | Cleveland Plain Dealer, Ohio, alternatives, industry | Comments (2)From a letter to editor in today’s Cleveland Plain Dealer
Bank fees will have you longing for a payday loan
Posted by Raphael W. Hardman/Cleveland November 20, 2008 11:31AM
Well, Ohio, with banks increasing fees and overdrafts nearing $40 per occurrence, I guess voting for Issue 5 wasn’t such a good idea after all. You better start praying that you don’t get laid off or fired (payday loan No. 1). Or that it stays warm this winter (loan No. 2). There is no increase in food prices (loan No. 3). And you don’t bounce a check (loan No. 4).
Just one of these emergencies will start the run on multiple payday loans. But now there’s a limit.
The same people who brought you Issue 5 have turned a blind eye to the banking industry that is begging its victims for help while at the same time robbing them blind. I guess $15 per $100 wasn’t such a bad thing after all.
Thanks, Ohio General Assembly. Good looking out.
Don’t drive payday lending “underground”
November 20, 2008 | alternatives, industry | Comments (0)Those are the thoughts of former Chief Executive for the Federal Reserve Bank of St. Louis, William Poole:
Poole used the payday loan industry as an example of the consequences more regulations would have. Markets like payday loans would be driven “underground,” where they are unregulated and pose a bigger risk to individuals.
How come the smartest people understand this?
Size matters
November 20, 2008 | alternatives, industry | Comments (0)Stop giggling, we’re talking about banks. These people think a return to a community banking model will solve all problems:
With the benefit of hindsight, however, we can see two clear facts that call into question whether global-scale finance really is more efficient than small-scale banking. First, the new system invested the world’s savings in a spectacularly irrational manner. The money that poured into underwriting mortgages on McMansions and tract houses in automobile-dependent, jobless suburbs, it is now obvious, could have been more profitably invested in just about anything else — in, for example, rebuilding America’s crumbling infrastructure, converting to sustainable energy sources, or constructing affordable rental housing near good jobs and schools.
In contrast, small-scale financial institutions generally avoided subprime lending and related derivatives, concentrated on traditional mortgage and small business loans, and today are in comparatively good shape. Though vulnerable to a downturn in the economy, with few exceptions they appear to be resistant to the financial contagion striking down larger institutions. So is bigger really better?
Petty politics in S.C.
November 20, 2008 | South Carolina, alternatives, industry, media coverage, states | Comments (0)And the payday lending fight last year is part of the reason Speaker Bobby Harrell is seeking more power to appoint committee chairmen. From the article:
The episode plays out as Haley lines up votes in a bid to become chair of the Labor, Commerce and Industry Committee, where last year she had shepherded the payday lending bill and saw it killed by leadership. She thinks Harrell is miffed at her for pushing efforts for more recorded votes on legislation.
Debt forgiveness
November 20, 2008 | personal finance | Comments (0)An MSN article says debt forgiveness is the new trend.
