Confusion in the Blue Grass State
March 27, 2009 | Kentucky, Lexington Herald Leader | Comments (0)Today’s editorial in the Lexington-Herald Leader is all over the place. They are upset that progress on passing additional regulations on payday lenders has been slow, they advocate for rate caps (which they admit will shut lenders down), yet they urge the governor to veto the reforms that have been passed.
It’s the law
March 26, 2009 | Kentucky, industry, regulation | Comments (0)Kentucky bill was signed into law late yesterday. Governor didn’t rule out further regulation, though.
Does CLOUT have clout?
March 24, 2009 | Kentucky, industry, industry critics, media coverage, states | Comments (0)The group rallied in Kentucky yesterday. From the story:
About 1,500 members of churches and neighborhood organizations gathered in Old Louisville last night to pledge their support for a crackdown on payday lenders.
Politicians and bank leaders joined members of the group Citizens of Louisville Organized and United Together — or CLOUT — at Memorial Auditorium for a meeting to launch a campaign they hope will catalyze legislation capping the annualized interest rate that payday lenders can charge at 36 percent.
“Tens of thousands of families in Louisville are trapped in an ongoing cycle of debt,” said the Rev. Elvyn Hamilton of Genesis Methodist Church.
The group says the industry collects $131million in fees from Kentuckians a year.
That’s a fact without any meaning. How much did Kentuckians save in bounced check fees and overdraft protection?
We doubt they have the clout
March 23, 2009 | Kentucky, media coverage, regulation | Comments (0)From a story out of Kentucky:
The organization Citizens of Louisville Organized and United Together, or CLOUT, will hold a meeting Monday to look at the issues surrounding payday lending.
Specifically, the group hopes to cap lenders’ interest rates at 36 percent. Some lenders in the commonwealth charge up to 400 percent APR on payday loans.
We think they’re a day late and a dollar short. Kentucky legislation creating a data base is sailing through.
We’re getting worn out
March 18, 2009 | Kentucky, industry, regulation | Comments (0)Editorials like this one out of Kentucky really make the Payday Pundit lose faith in humanity. Facts without context (“Kentuckians pay an estimated $131 million annually in fees on payday loans.” So? How much in overdraft and bounced check fees did they avoid?) and other anti-market rhetoric.
The good news is, the fight is over in Kentucky for now.
Virginia, Kentucky, Washington
March 13, 2009 | Kentucky, Virginia | Comments (0)PDLindustryblog weighs in.
Kentucky bill heads to governor
March 12, 2009 | Kentucky, Uncategorized, industry | Comments (0)From the article:
House Bill 444 passed 83-11 and now goes to Gov. Steve Beshear.
HB 444 began as a measure to allow the state to create a database to track payday lending activity in Kentucky.
But it was changed in the Senate to bar any new payday lenders from entering Kentucky for 10 years — a change critics said would create a monopoly for the industry, which offers high-cost, short-term loans.
Great letter from CFSA’s Tommy Moore
March 12, 2009 | Kentucky, alternatives, industry, media coverage, states | Comments (0)Here’s the entire text from today’s Lexington (KT) Herald-Leader:
Limits on payday lenders ignore need for services
I doubt I’m alone when I say that limiting the amount of financial options provided to consumers doesn’t exactly register as an act of consumer protection.
Advocating in a March 10 editorial for a 36 percent annual rate cap is synonymous with advocating for the elimination of payday lenders because, believe it or not, there is no way this industry can stay afloat by charging $1.38 on a $100 two-week advance.
Alexandria, Va.
Pretending like there is no demand for short-term credit and forcing payday advance customers to choose between more expensive alternatives, like bounced check fees or overdraft protection, is more like the antithesis of what consumer advocates should be fighting for.
Adults should be given all of the information they need and then be allowed to make the decision about what financial products work best for their families and their individual situations.
Tommy Moore
Executive Vice President
Community Financial Services Association
A solution?
March 11, 2009 | Kentucky, industry, regulation | Comments (0)The Louisville Courier News editorial writers weigh in with what they call a “solution”:
Consumer advocates promote the federal solution — a 36 percent limit on the annual percentage rate charged for short-term payday loans. That approach also has been adopted by 15 states.
Wrong. Fifteen states have NOT adopted a 36% rate cap. And the only thing 36% rate caps solve is diminishing competition and reducing jobs.
Editorial board supports free markets, we think
March 10, 2009 | Kentucky, industry, media coverage, regulation | Comments (0)Not sure what to make of this editorial out of Kentucky:
At the industry’s request, the Senate State and Local Government Committee last week approved a 10-year moratorium on new payday loan outlets opening in Kentucky.
The effect would be to protect the companies that are already here from new competition and preserve their market shares.
It does nothing for consumers, who turn to the short-term lenders when they need cash to, for example, keep the lights and heat on or avoid a bounced-check fee.
