PBS Oklahoma affiliate’s ONR examined the price of payday loans in the state with the following broadcast segment that aired earlier this week. In the story, Lis Exon talks to Oklahomans about their use of the product, how often it’s used, and why O

K consumers are choosing to use it over its “traditional” alternative.

Though the cost is more expensive than a credit card, 13 percent of Oklahomans have used a loan store in the last five years. Not only has the product become more mainstream, but Oklahomans don’t always have access to credit cards (due to credit ratings or lack of access), and prefer a payday loan for its convenience, reliability, and upfront disclosures.

When asked why she would choose a payday loan over a credit card, Billie Adams, an OK payday loan customer said: “This I can control if I need it for a week, if I need it for two weeks. I can take control and pay it back.”

And how do complaints stack up against storefront payday lenders in Oklahoma? Well, they’re virtually nonexistent. According to Rick Brinkley of the Tulsa Better Business Bureau, in the last three years, only complaints about some online payday loan companies have skyrocketed. “We’ve seen nearly 3,000 complaints on tribal payday loan companies,” he said. “We have seen one complaint, I believe, on a traditional payday loan company.”

“I would personally prefer to have storefront payday loan companies in the state, with restrictive laws that are pretty limiting to what a consumer can get. Cause if we do away with payday loan companies in this state, we are literally pushing the poor to these websites where they will be—in my opinion—taken advantage of,” Brinkley said.

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PBS Oklahoma affiliate’s ONR examined the price of payday loans in the state with the following broadcast segment that aired earlier this week. In the story, Lis Exon talks to Oklahomans about their use of the product, how often it’s used, and why OK consumers are choosing to use it over its “traditional” alternative.

Though the cost is more expensive than a credit card, 13 percent of Oklahomans have used a loan store in the last five years. Not only has the product become more mainstream, but Oklahomans don’t always have access to credit cards (due to credit ratings or lack of access), and prefer a payday loan for its convenience, reliability, and upfront disclosures.
When asked why she would choose a payday loan over a credit card, Billie Adams, an OK payday loan customer said: “This I can control if I need it for a week, if I need it for two weeks. I can take control and pay it back.”
And how do complaints stack up against storefront payday lenders in Oklahoma? Well, they’re virtually nonexistent. According to Rick Brinkley of the Tulsa Better Business Bureau, in the last three years, only complaints about some online payday loan companies have skyrocketed. “We’ve seen nearly 3,000 complaints on tribal payday loan companies,” he said. “We have seen one complaint, I believe, on a traditional payday loan company.”
“I would personally prefer to have storefront payday loan companies in the state, with restrictive laws that are pretty limiting to what a consumer can get. Cause if we do away with payday loan companies in this state, we are literally pushing the poor to these websites where they will be—in my opinion—taken advantage of,” Brinkley said.
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Barbara Martin, Divisional Director of Operations for Advance America, had a great response to an article that came out last week in the Birmingham News online.

“Your uninformed conclusion to eliminate this service from the marketplace would only force consumers who rely on payday advances to use other, less-regulated, more-costly, short-term credit products such as illegal offshore Internet loans and overdraft protection, or pay late fees on credit cards and utility bills.

In Georgia and North Carolina, where payday lending was effectively banned, a Federal Reserve Bank of New York staff report found bounced checks, personal bankruptcies and complaints about other types of lenders jumped significantly when consumers no longer had the regulated payday-loan option.”

Advance America’s CEO Patrick O’Shaughnessy on healthy competition within the short-term credit market, whether from banks or non-bank providers:

“I believe consumers benefit from having multiple options.

We’ve recently seen activity from both depository and alternative financial service providers as they focus on developing strategies to better serve their customer short-term credit needs.

…

Loan services reports since August 2010, when new rules took effect that prohibit banks from automatically enrolling customers in overdraft plans for debit cards or ATM transactions. The overall opt-in rates for such plan has grown to exceed 77%. This high opt-in rate clearly demonstrates large consumer demand for short-term credit and that consumers regard overdraft as a safety net and not as a penalty.”

To read more from AEA’s earnings call transcript, click here.