“Not predatory”
February 24, 2009 | Kansas, customers, employees, industry, positive media coverage | Comments (0)Tom Linafelt of QC Holdings, a Kansas City-based payday lender, gives the readers of the Lawrence Journal some facts:
According to “An Analysis of Consumers’ Use of Payday Loans” by researcher Gregory Elliehausen of George Washington University, “customers used the loans a small or moderate number of times during the past year, typically for less than a month at a time. Such use seems consistent with the intended purpose of payday loans as short-term borrowing to pay unexpected expenses or relieve temporary shortfalls in income.”
Finally, “few payday loan customers considered payday loans as a debt trap. Only about 3 percent of payday loan customers mentioned difficulty of getting out of debt as a reason for being dissatisfied or only partially satisfied with their most recent new payday loan.”
Have you noticed how rarely newspapers editoral writers quote solid, respectable scholarship in their rants?
Who cares about jobs these days?
February 24, 2009 | Virginia, customers, employees, industry, regulation | Comments (0)Not the Virginia legislature. From the story:
The House and the Senate are falling in line behind the latest clampdown on high-cost, instant loans, with both sides moving toward floor votes during the next several days.
The Senate Commerce and Labor Committee, following the lead of its House counterpart, yesterday backed legislation blocking an end-run by payday lenders on restrictions approved last year but took effect less than two months ago.
Nearly three-quarters of more than 800 money stores in Virginia have been authorized by the State Corporation Commission to offer open-ended loans that exceed the $500 maximum for payday loans and carry virtually unlimited fees.
The latest move by the General Assembly against lenders, who have spent millions on lobbying, advertising and campaign contributions, is designed to confine most of them to payday loans.
And the legislation is designed to force Virginians into few choice for short-term credit.
Wisdom in Ohio
February 23, 2009 | Ohio, customers, employees, industry, media coverage, research | Comments (0)A payday loan operator in Ohio had this to say in the the Columbian:
Consumers may choose a payday loan, with its one-time fee, as their best financial choice to avoid higher one-time fees such as nonsignificant fund fees which average a higher APR than a payday loan. Borrowing $100 from a payday lender costs a flat fee of $15. A returned check fee is $25-plus.
Owners, empoyees and others in the industry need to arm themselves with the facts and hold newpapers accountable such as this owner is doing. cfsaa.com is the place to go for the facts.
“Service at a Value”
February 22, 2009 | Cleveland Plain Dealer, Ohio, customers, employees, industry, media coverage, personal finance | Comments (2)Ted Saunders, the CEO of Checksmart, an Ohio-based payday lender, has a great op-ed in the Cleveland Plain Dealer today:
The simple fact, one that your article failed to accurately note, is that borrowers under the Mortgage Loan Act are paying far less for their loans than they were under the former payday loan laws. When a borrower takes a check or money order as proceeds of a loan, the borrower may (and many do) take that instrument to his or her bank and deposit it free of charge. For the borrowers who deposit or cash their checks at their own bank, their real cost for a two-week $400 loan is under $30, which is less than the $60 paid by them under the former payday loan law and less, according to the FDIC, than the cost of an overdraft at an FDIC bank.
The Plain Dealer’s criticism of former payday lenders turning to other legislative enactments for alternative business models is misguided because it fails to recognize the significant cost savings benefitting consumers and because the decision to turn to these alternatives came directly from the Ohio Legislature. Apparently, in The Plain Dealer’s eyes, only banks should be permitted to extend credit to Ohioans, regardless of their higher fees.
The editorial writers at the Cleveland Plain Dealer are reflexively hostile to business. It’s great to see a payday lending CEO taking them to task.
“I work for a payday lending company”
February 3, 2009 | employees, industry, media coverage | Comments (0)A Washington State payday lending employee is making her voice heard in a letter to the editor:
What most people fail to understand is that in the state of Washington, payday loan companies charge a flat fee, which is $15 per $100 borrowed. Any third grader could tell you that’s 15 percent. Compared to, say, what a bank charges, even for an overdraft of $5, this seems reasonable.
Our customers know exactly how much their loan will cost on the day it’s due.
More than 50,000 people are employed by the payday lending industry. If all of them would make their voices heard during these legislative fights, it would have a huge impact.
Impact of 36% cap felt in Ohio
January 26, 2009 | Oregon, best practices, customers, employees, industry, industry critics | Comments (0)They’re still writing about the impact of the 36% cap in Ohio:
Jennifer Kindel, market manager for Cashland offices in Northeast Ohio, said they’ve closed 40 locations because of the legislation, but she didn’t give a specific number of layoffs.
Kindel said the company provided the loans for periods between 14 and 30 days, charging a flat $15 fee for every $100, not charging 391 percent interest as was the claim. The higher interest figure came from multiplying the flat fee out over a year’s time, she said.
“We’re talking about a two-week loan. You can’t take the loan out for a year. To attach (an) APR (annual percentage rate) doesn’t make sense,” Ferguson said.
She said more than 90 percent of their customers pay back the loans on time. Those who don’t are offered an extended payment program. Customers can’t take out two loans at Check Into Cash at the same time, she said.
At this risk of being repetitive, the customer’s voice is missing from this story. What are citizens of Ohio doing to meet their short-term credit needs?
Arizona to take up legislation?
January 10, 2009 | Arizona, employees, industry, media coverage, regulation | Comments (0)Looks like payday lending is on the agenda this year. The law regulating the industry expires in 2010.
Business not booming
December 26, 2008 | Indiana, customers, employees, industry, media coverage | Comments (0)At least for payday lenders in Fort Wayne, Indiana. From the story:
The survey shows that more payday owners are reporting a decline in business this year, with about three times as many reporting a decline in December as reported an increase in lending.
Bill Smith, who owns Easy Money stores, said customers who turn to payday lenders are like everyone else this year and are cutting back.
That means using available funds for holiday purchases and not borrowing.
“Our customers are trying to do a cash Christmas this year,” he said.
This contradicts a lot of supposition in the media that the payday lending business is booming.
…”homemakers, firefighters and teachers…”
December 24, 2008 | California, Center for Responsible Lending, Consumer Federation of America, LA Times, customers, employees, industry, industry critics, media coverage, positive media coverage | Comments (0)Those are the payday lending customers discussed in this this four-page story in the Los Angeles Times headlined: “More in middle class using payday lenders”:
With tidy lobbies that resemble bank branches, many outlets are in shopping centers anchored by Wal-Marts, grocery stores or other big retailers. Lenders say their typical customers include homemakers, firefighters and teachers, whose steady jobs qualify them for loans.
Yes, the typical customer is the typical American.
Here’s the side bar to the article: “How payday loans work.”
Short of cash to fix her ailing BMW this year, Lunetta Blanks could have paid the bill with plastic. Instead, the federal investigator opted for a payday loan, shelling out $300 to pay off a $255 loan from the Advance America branch in her Silver Lake neighborhood.
Recycling in South Carolina
December 23, 2008 | South Carolina, alternatives, customers, employees, industry, media coverage, states | Comments (0)Recycled opinion that is. The Myrtle Beach Sun News supports the same payday lending “reforms” this year that it did last year.
