Not much coverage of Wisconsin bill
May 29, 2009 | Wisconsin, industry, regulation | Comments (0)There were a few stories on radio and a couple of print stories like this one. The Payday Pundit will talk to some industry people and get an assessment of the odds of this bill moving.
McAuliffe still at it
May 29, 2009 | Virginia, industry | Comments (0)From the Richmond Times Dispatch:
The McAuliffe mailer draws a contrast between himself and the others on renewable energy, proposed bans on payday lending and gifts from lobbyists and contributions from electric utilities.
Wisconsin industry statement
May 28, 2009 | Wisconsin | Comments (0)FOR IMMEDIATE RELEASE
May 28, 2009
Contact: Erin Krueger, 608-256-7701Short-Term Loan (Payday Advance) Industry Statement on Hintz Bill
(MADISON, Wis.)—Following is a statement from Erin Krueger, policy director for the Wisconsin Deferred Deposit Association, in response to a bill drafted by Rep. Gordon Hintz on finance charges for licensed lenders.
“The Wisconsin Deferred Deposit Association is committed to promoting legislation and regulation that balances the interests of the short-term loan [payday advance] industry with substantive consumer protections, all while preserving access to credit options.
“Unfortunately, this bill will remove a viable and critical credit option and ultimately hurt Wisconsin consumers, not help them.
“Short-term loans are a reasonable financial choice for some consumers. These are a transparent and regulated financial product, and now more than ever, in the midst of extreme economic uncertainty, Wisconsin consumers need continued access to small-dollar, short-term credit.”
The Wisconsin Deferred Deposit Association (WDDA) is a statewide trade association representing the short-term loan (payday advance) industry. WDDA members represent three-fourths of the market in the State of Wisconsin. For more information, please visit www.wddagroup.org.
Witty and right
May 28, 2009 | Wisconsin | Comments (0)From a Wisconsin Law Journal blog:
When Contracts are Outlawed, Only Outlaws Will Have Contracts
May 28, 2009
Today, May 28, Rep. Gordon Hintz is proposing a new law to outlaw payday loans.
http://www.wispolitics.com/index.iml?Article=159936
That’s not what the law actually says, of course. It merely imposes a cap of 36 percent interest annually on such loans. Consider the effect, however.
A press release from Rep. Hintz notes that, if a consumer borrows $100 for two weeks, and pays $20 interest, he is being charged a whopping 525 percent interest. However, if the law goes into effect, the interest on that two-week, $100 loan would be $1.37.
Obviously, no one is going to make such loans. It would not be enough to cover even a fraction of the overhead of running the business.
525 percent is an enormously high interest rate. But if an adult decides that he would rather pay that interest than a $35 per check fee for overdrafting his checking account, or whatever other unpleasant alternatives he may have, the state has no right to prohibit him from doing so.
Rep. Hintz calls his bill the “Payday Lending Consumer Protection Act.” But only two groups of people will benefit should this bill pass: (1) the loansharks who will take the place of payday lenders; and (2) the vendors of the baseball bats that the loansharks will use to break the knees of debtors who can’t pay them back.
Update Wisconsin:
May 28, 2009 | Wisconsin, industry, regulation | Comments (0)This story confirms that the 36% rate cap is being introduced. CFSA has media relations and lobbying resources in place in Wisconsin to fight this legislation.
’tis better to have loved and lost
May 28, 2009 | alternatives, industry, personal finance | Comments (1)Eight companies we used to love that have gone under during the recession.
Banks boosting fees
May 28, 2009 | USA Today, alternatives, industry | Comments (0)And as usual, USA Today is all over it:
But even as outrage was building over credit cards, banks seized upon another way to squeeze profits out of struggling consumers: higher checking account fees. These fees can add up to hundreds of dollars before consumers know there’s a problem.
As the economy struggles to climb out of a recession, banks are extending some of their most profitable — and controversial — credit card practices to checking accounts.
For example, banks are making it easier and more punitive for consumers to spend more than they have in their checking accounts, just as they allow consumers to spend past their card limits and charge them a steep fee for doing so. Some analysts believe that new credit card restrictions will only accelerate fee increases on bank accounts.
The key is transparency and disclosure. There are plenty of banks for consumers to choose among.
What’s the world coming to?
May 28, 2009 | alternatives, industry | Comments (0)The era of “bling” is over. From the story:
“It’s hard to rap when gold is at $950 an ounce,“ {pawnshop owner} says.
Sorry
May 28, 2009 | Uncategorized | Comments (0)Problems with the server this morning. To make it up to you, we are posting this secret tape of payday lending critics explaining payday lending.
Oh, PDL legislation part of a “backlash”
May 28, 2009 | federal legislation, industry, research | Comments (0)Fort Wayne Journal Gazette states the obvious:
The bailouts may be winding down for the financial services industry, but the regulatory buildup is just beginning. New measures signed into law last week on credit card companies and mortgage lenders signal the postelection shift in attitude about the government’s role in vigorously competitive markets. Congress is also considering additional safeguards on payday and home loans, and the administration may propose a new commission to regulate consumer credit and investment products.
Rather than trusting market forces, Democrats in Congress and the administration argue that unbridled capitalism has victimized consumers. Deregulation, seen for so long as a way to spur innovation and efficiency, is now blamed for enabling onerous mortgages, skyrocketing credit card fees and burgeoning interest charges.
I blame the media for not understanding and reporting earlier on the subprime mortgage crisis.
