Consumer victory
April 11, 2011 | industry, Kentucky, Lexington Herald Leader, positive media coverage, regulation, State legislation | Comments (0)Kentucky consumers value choice. Whether it’s what brand of soft drink to buy, or what model car to drive, Kentuckians want the right to make their own decisions for their own reasons.
At its heart, that is what the battle over payday lending is about, the consumers’ right to choose which financial products are best for them and their individual circumstances.
Bold bias
March 29, 2011 | industry critics, Kentucky, Rate Caps, State legislation | Comments (2)An op-ed writer sharply attacks the payday lending industry and gives advice on how to ban the industry, including this gem:
3. Find a poster child for the payday industry’s ills.
And ignore the thousands of satisfied customers who use short-term credit services to their advantage. It’s rare that you see a newspaper so boldly broadcast its bias and give details on how stories are slanted.
Keep explaining
March 7, 2011 | Kentucky, Lexington Herald Leader, Rate Caps, State legislation | Comments (0)The Lexington Herald-Leader in Kentucky wrote a long piece about payday lending in Sunday’s edition. Some people will never understand the business of payday lending, but people who do keep explaining.
Rabenold said the rate cap was a back-door way to drive them out of business.
“I cannot pay the rent at 36 percent APR,” Rabenold said. “That allows me to charge 3 percent per month, or 1.5 percent for two weeks. … In every state that has been imposed, it has eliminated the business. Thirty-six percent APR is absolute prohibition.”
A legislative committee voted against banning payday loans this year, as well.
Pay up
February 18, 2011 | Kentucky, Rate Caps, State legislation | Comments (0)The Louisville Courier-Journal is making real estate promises it can’t keep:
Moreover, if their annual interest charges for non-military customers in Kentucky are capped at 36 percent, the payday lenders would have you believe, they will pack up and take their 2,000 or so jobs with them.
If you believe that, we’ll sell you Brooklyn and the Bronx.
Every state that has banned payday loans through a rate cap suffered job losses. Kentucky would be no different.
Quote of the day
February 17, 2011 | Kentucky, positive media coverage, Rate Caps, State legislation | Comments (0)A Kentucky lawmaker encouraged those asking for a ban of payday loans to offer competition:
Gooch also wondered why some organizations supporting HB 182 — including AARP of Kentucky and a coalition of religious groups — don’t step up to provide the service.
“Maybe you want to loan to these folks at 36 percent,” he said.
‘Stick a fork in it’
February 17, 2011 | industry critics, Kentucky, positive media coverage, Rate Caps, State legislation, states | Comments (0)A bill banning payday lending in Kentucky died in a legislative subcommittee yesterday:
“It’s done,’’ said a disappointed Rep. Darryl Owens, a Louisville Democrat and the sponsor of House Bill 182. “You can stick a fork in it.”
The House Banking and Insurance Committee voted 13-10 to reject HB 182, which would have limited annual interest on such loans to 36 percent.
Fundamentals
February 9, 2011 | Kentucky, Rate Caps, State legislation | Comments (1)The Pundit used to have an old football coach that preached fundamentals. You have to learn the basics before you try anything fancy, he would say. Well it looks like the newspapers in Kentucky need a good lesson in the fundamentals of payday lending. A good PDL 101 course.
Capping at 36 percent the annual interest payday lenders can legally charge their customers isn’t going make those businesses unprofitable — less profitable, maybe, but a sweet return on the dollar nevertheless.
Not only is that unprofitable, it’s a ban of payday lending. Do the math. No where in the world are short-term loans offered for $1.38 per $100. It’s very fundamental.
How much is a majority?
February 8, 2011 | Kentucky, Rate Caps, State legislation | Comments (1)There are plenty of soundbites in the latest story from Kentucky. But the one that really struck the Pundit was from the lead legislative sponsor.
Owens said he was disheartened to see that people 60 years or older took out 13 percent of the loans.
“They prey on seniors,” he said. “That is the most unconscionable aspect to me.”
Does 13 percent qualify for a majority or enough to say that a product is predatory on that segment of the population? Who takes out the other 87 percent of loans?
Conflict of interest
February 7, 2011 | Kentucky, Rate Caps, State legislation | Comments (0)The AARP continues to call for a bill that would shutdown the payday lending industry in Kentucky.
It’s time to cap the interest on payday loans in Kentucky at 36 percent.
The AARP offers credit cards with high late fees and cash advance options. Does that make their involvement in trying to kill payday lending a conflict? Just a thought.
Common story, common errors
February 4, 2011 | industry critics, Kentucky, Rate Caps, State legislation | Comments (1)A Kentucky television station interviews a woman who says her life was derailed by payday loans, but there are some glaring problems with the account:
But as Kowana Goode-Story discovered, they can have a downside.
“It was hard to get the money back to them because I’m already living paycheck to paycheck,” she says.
She figured her original loan of $500 ended up costing her between $1,500 and $2,000.
Goode-Story says there was only one way out.
“I had to file bankruptcy.”
First, rollovers aren’t allowed in Kentucky. That means you can’t just pay the interest and not the principal. So you can’t rack up $1,500 on a single loan. Also, payday loans don’t impact your credit rating like credit cards and other forms of credit. It’s hard to blame bankruptcy on payday loans.
This lady now works for a group urging lawmakers to shutdown payday lending.
