“Montana voters were misled into believing that a 36 percent APR cap would lower the cost of short-term loans,” said QC president Darrin Andersen. “Today’s hard reality is that that cap is forcing cash-strapped Montana consumers to more clostly and credit-damaging options like bounced checks, late bill payment penalties and unregulated, offshore Internet lenders.”

QC said it has extended loans to more than 14,000 consumers in Montana.

Critics should be honest when pushing rate caps.  They are a ban on payday lending.  Consumers will NOT get 36% short-term loans.   

Annualized, payday loan interest rates may be as much as 300 percent or higher, drawing the ire of consumer advocates and earning the industry labels including “legalized loan-sharking,” “financial apartheid” and “predatory lending.”

But the cost is up front and transparent, Fulmer said.

Customers “see our product as a cost-competitive alternative. You often hear critics talk about exorbitant annual percentage rates, but you have to look at an apples-to-apples comparison,” Fulmer said. Credit card late fees interest rates and overdraft fees can be far more expensive on an annualized basis, he said.

Exactly.   For many people, a payday loan is the right choice when facing an unexpected expense.   If a pawn loan or credit card is a better choice in a  particular situation, the consumer is the best person to decide that.

Instead of burgers, {payday lenders} serve up complex products sold as easy credit to consumers who often don’t need them or understand their basic terms.

A complex product?  Our worst critics have never made that claim before.   Consumers don’t need them?   He’s has obviously not met a single one of our customers.   We don’t know what rarefied air he breathes, but payday lending customers have medical bills, car repairs and other urgent needs.   I guess he knows better than 19 million American families about what they need.

Ryan Harris, a spokesman for Cleveland, Tenn.-based Check Into Cash, which has a branch in Front Royal, said that his company does not offer payday lending in Virginia, but added that putting a 36 percent cap on short-term loans is unrealistic.

“[On an] annualized percentage basis, there’s just no way that anybody can offer the small, short-term loan on 36 [percent] interest,” Harris said. “That’s pretty much the long and short of it. That 36 percent, that’s just a truly unfair way to gauge a small-term loan.”

At least a thousand new government workers will be hired as a direct result of the legislation, which triggers a massive wave of rulemaking by regulatory agencies.

For law firms on K Street, the Wall Street reform means big business, and banks and other financial institutions affected by the sweeping overhaul are expected, at a minimum, to shift in-house lawyers to regulatory work.

“Lawyers always win,” joked one Washington insider, who was quick to say that he wasn’t just saying that because he’s a lawyer.

The Securities and Exchange Commission (SEC) expects to add about 800 new positions to carry out its new and expanded responsibilities, while the Commodity Futures Trading Commission (CFTC) plans to increase its workforce by nearly 50 percent, to 1,000 employees, a spokesman told The Hill.

Payday loan customers in Pinal County already are feeling the impact of the expiration on Thursday of a law allowing the lending practice beginning Thursday.

Under the change, lenders no longer will be allowed to set interest rates as high as 460 percent annually. A 10-year-old law allowing them to go above the 36 percent rate cap for other lenders expires today.

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The Community Financial Services Association of America, an industry trade group, says that although payday loans are expensive, when people are in need of short-term cash they are often glad to have the option available to them.

Many of those who use payday loans have limited alternative sources of credit such as pawn shops, bank overdraft protection, credit card cash advances and informal lenders, according to CFSA,

Efforts to eliminate payday lenders from communities do not address the need some consumers have for short-term credit, and lack of access to the loans could place customers at greater risk for bounced checks, disconnected utilities or lack of funds for emergencies such as medical expenses or car repairs, the organization said.