The debate continues:

I actually think that Nick is on the right track. If Mr. Gutierrez is willing to create a bill that would allow th industry to exist and seems to be open to discussing the issues, we should seek to create a standardized rate for all states, not just a cap. I do not have numbers on the illegal internet lending, but I would feel pretty confident that states that do not allow PDL’s have a much higher rate of complaints to their respective DFI’s than states that allow the product. If HR1214 would allow lending in all states, that would offset losses in states that have a fee in excess of $15 per $100. At the same time, it would mostly maintain the current staff while adding new jobs by opening up new states. And we all know that new jobs equals more taxes for our pitiful deficit. A win-win for everyone!

There is some confusion on Congressman Louis Gutierrez’s payday lending bill.   The congressman’s fee of 15 cents per dollar is a ceiling not a floor.  So states are still free to further regulate the industry.  As well, the bill does not pre-empt state laws so it is not a 50-state bill.   CFSA’s “Know your fee” page shows the fees in each of the states.  You’ll see higher fees in 23 states than the Gutierrez bill permits.

Which western country do you think pays them?   Wrong!  It’s Australia.

Okay, that’s enough regulating of the finance industry for one legislative session.  From the story:

Measures before the House and Senate are designed to enhance protections for credit card customers. The House debated a bill that would prohibit so-called double-cycle billing and retroactive rate hikes and ban the issuance of credit cards to people under 18, but wouldn’t take effect until a year after enactment. Another requirement in the bill, that customers receive 45 days notice before their interest rates are increased, would go into effect in 90 days.

For the best reasoning as to why this is a bad idea, see the John Stossel piece we discussed below.

A terrific op-ed today in the Financial Times (registration required) by two economists who warn Congress about overreaching on payday lending legislation:

So what should policymakers do? The evidence suggests that they should approach the problem by improving the consumer decision-making environment – the “decision architecture” – rather than by bringing in the wrecking ball of an interest-rate cap that would in effect drive ­payday lenders out of business.

First, a cap would surely deprive sensible but distressed consumers of the ability to make productive “investments” in job retention and family stability. Second, a cap will almost as surely have unintended consequences. For example, in a recent study one of us found evidence that borrowers shut out of the payday loan market in Oregon turned to alternative sources of liquidity that can be even more expensive (such as bank overdrafts and paying bills late).

Restricting supply does not restrict demand. While the wrecking ball may hit payday lenders, history suggests that other credit providers – from banks to utilities to loan sharks – will emerge from the destruction with ways to provide even more expensive loans.

Exactly.

A reader to the Salt Lake City Tribune suggests payday lenders post their rates.  Has he ever been to a store?

Great story in the Wichita Eagle about a local payday lender, Speedy Cash:

Wichita’s Speedy Cash chain was founded 12 years ago by three guys who grew up together, went to Northwest High and Kansas State together, and went into business together.

It’s another Wichita entrepreneurial success story: Speedy Cash has grown roughly 25 percent per year since then and now has 82 shops across nine states, including six in Wichita.

There are now 116 people working at the corporate headquarters in two buildings at 3527 N. Ridge Road.

But these days, the payday lending industry, including Speedy Cash, is facing some pretty stiff challenges.

You’ll have to read it yourself to see where the “blues” fit it, but it’s a very straightforward, unbiased piece.  And while we’re on the subject of Wichita, can we agree that “Wichita Lineman” is one of the greatest songs ever?

From John Stossel’s latest column:

Think about what a credit card is. It’s convenient access to unsecured loans, permitting consumers to buy things large and small — not to mention emergency services — without cash. Pay the bill promptly, and you enjoy a fantastic service for virtually nothing. If circumstances prevent you from paying the bill in full, you can set your own payment schedule, realizing there is a minimum payment and that you will be charged interest on the unpaid balance. No surprise there.

This is the must-read of the day.

The Conscious Consumer provides a helpful list of money wasting items.    The gift wrap issue reminds the Payday Pundit that Mother’s Day is coming up.   I know there’s a recession, but don’t cheap out on your mother.

PEW polls the American people on what they think their basic needs  are.