Pay less for banking & loans
February 26, 2009 | alternatives, industry, personal finance | Comments (0)Really good tips here from Kiplinger.
Who is Herb Sandler?
February 26, 2009 | Herb Sandler | Comments (3)From Townhall.com:
Just who is the man Herb Sandler? First he’s embroiled in scandal and second he’s a liberal financier of left-wing causes. I posted back on Feb. 16th the story from 60 Minutes that him and his wife bilked people into engaging in loans where their payments didn’t even cover the interest on the loan — so these poor people got poorer and poorer every time they made a house payment.
And why did he found Center for Responsible Lending?
Montana outlook?
February 26, 2009 | Missouri | Comments (1)PDLindustryblog is upbeat.
This annoys me
February 26, 2009 | Ohio, industry, media coverage, regulation | Comments (2)The Payday Pundit can’t stand it when politicians throw out words like “reasonable” or “sensible” which puts anyone who disagrees with them automatically outside the mainstream. It’s pure demagoguery.
In this case the culprit is Ohio State Senator John Carey calling for “reasonable” regulations on payday loans.
Paid to reduce debt
February 26, 2009 | Motley Fool, alternatives, industry, personal finance | Comments (0)The Motley Fool seems to like the American Express program of paying people $300 to close their credit card accounts.
A $15 million pawn loan
February 26, 2009 | alternatives, industry | Comments (0)With a celebrity thrown in. We liked this story:
Annie Leibovitz, the photographer renowned for her portraits of many of the world’s famous and powerful, has pawned off the copyright and negatives of all her work and any future photos to a New York City art lender in order to raise money to cover her debts.
The New York Times reported that Leibovitz borrowed US$15.5-million from Art Capital Group and used her works, as well as some of her property, as collateral.
They really want a ban
February 26, 2009 | Kentucky, alternatives, customers, industry, industry critics, media coverage | Comments (0)That’s the only way to interpret the groups in Kentucky who say the current bill “doesn’t go far enough.” From the story:
Terry Brooks of Kentucky Youth Advocates said opponents want a cap on interest rates, something Bell has tried to pass in his previous bills. The federal government now caps such pay day loans at 37 percent for military personnel.
“Our position is that the military cap is working,” Brooks said, adding opponents fear this might be “the one bite of the apple” and lawmakers might not be willing to look at interest rates in the future after passing Bell’s bill. Some calculations indicate some pay day lenders charge as much as 391 percent on loans or “deferred deposits.” Such loans are made in anticipation of upcoming customer paychecks and customers are often trapped in a cycle of signing over their paychecks to pay for smaller loans taken out earlier to get them to payday.
The “military cap is working” in the sense that military personnel no longer have access to payday loans. As the Payday Pundit said, these people really want a ban.
Real-world results of APR caps on payday loans
February 25, 2009 | DC, New Hampshire, Ohio, Oregon, industry, regulation | Comments (0)A few states have passed legislation capping the annual interest rates on payday loans so low that lenders are forced to close their stores and consumers are left with fewer credit options. While critics argue that payday loans can be offered under these annual rate caps, they also admit that these low APRs ban the product. In fact, Uriah King, with the Center for Responsible Lending (CRL), has acknowledged lenders often close their doors when a 36% annual rate cap is adopted and admits that, “driving the practice of payday lending out of the state—not simply reigning in interest rates” is CRL’s goal .
The real-world examples are proof of the consequences of overly restrictive annual rate caps. Hundreds of stores have closed, thousands of employees have lost their jobs and hundreds of thousands of consumers are left to choose among less desirable credit options.
Read more about annual rate caps in Oregon, Ohio, New Hampshire and D.C.
Kentucky bill moving
February 25, 2009 | Kentucky, industry, media coverage, regulation, states | Comments (0)This looks like a sensible bill. Of course, “consumer groups” are outraged. That’s how you know it’s sensible.
President Obama: “The flow of credit is the lifeblood of our economy.”
February 25, 2009 | Uncategorized | Comments (0)Excerpt from Obama’s Address to the Nation:
The concern is that if we do not re-start lending in this country, our recovery will be choked off before it even begins.
You see, the flow of credit is the lifeblood of our economy. The ability to get a loan is how you finance the purchase of everything from a home to a car to a college education; how stores stock their shelves, farms buy equipment, and businesses make payroll.
But credit has stopped flowing the way it should. Too many bad loans from the housing crisis have made their way onto the books of too many banks. With so much debt and so little confidence, these banks are now fearful of lending out any more money to households, to businesses, or to each other. When there is no lending, families can’t afford to buy homes or cars. So businesses are forced to make layoffs. Our economy suffers even more, and credit dries up even further.
Responding to the meltdown in the financial marketplace, financial institutions are reeling in credit lines and requiring borrowers to meet stringent credit standards. Consumers also face higher prices, fewer choices and less competition as banks continue to consolidate.
Now, more than ever, Americans need continued access to small-denomination, short-term credit.
Despite the turmoil, the payday lending industry continues to assume all fiscal risk and provide access to credit to millions of middle-income consumers. The rates and requirements remain the same. Payday lenders require no collateral on the small-denomination loans and do not report to credit agencies, yet customers continue to meet their obligations and repay when due. The payday lending industry remains sustainable and operational, except in states where annual interest rate caps preclude viability.
