According to the article, “People shed debt by choice and by force, reflecting a combination of the thrifty attitudes and tighter lending conditions that have defined the recession…33% of banks in the Fed’s loan officer survey reported tighter terms and conditions for approving consumer loans other than credit cards. None of the banks said they loosened credit standards.”

As we’ve said, financial institutions are reeling in credit lines and requiring borrowers to meet stringent credit standards.  Consumers also face higher prices, fewer choices and less competition as banks continue to consolidate. Now, more than ever, Americans need continued access to small-denomination, short-term credit.

In today’s Wall Street Journal.

According to the Wall Street Journal,

Earlier this month, the bank sent notices to customers announcing a slew of pricing changes, scheduled to go into effect June 5, that would have raised the overdraft fee to $39 from $35 per item. On Monday, citing the “increase in unemployment,” the bank said it was suspending that increase and keeping the fee at $35, according to spokesman Jim Pierpoint.

Either way, if a payday loan costs $15-$17 per $100…you can see why consumers use payday loans to avoid overdraft fees.

From today’s Wall Street Journal article:

Banks say that raising fees and rates, even on low-risk customers, is a legitimate way to recoup some of the costs of the bad loans still on their books. They also say taxpayers have a financial interest in seeing the industry quickly return to profitability. Any revolt over price hikes could intensify the crisis by depriving institutions of a key income source, say banks. New restrictions on these lending practices “may truly have an impact on profitability,” said Gerard Cassidy, a bank analyst with RBC Capital Markets.

The Wall Street Journal offers advice on everything from what to do if you are getting hit with overdraft and late fees at your bank to what you can do if someone posted embarrassing photos of you on Facebook or MySpace.

The Wall Street Journal reports:

In some cases, banks’ former darlings — consumers who paid consistently and on time but let their balances ride — now are being hit hardest, asked to stomach higher interest rates and fees or try their luck with different card issuers.

I don’t know what it is with the Wall Street Journal, but they seem to have it in for the payday lending industry.   An article today about Rent-A-Center says the company asked a charity it supports not to endorse an effort to ban payday loans.  Rent-A-Center put out this reply.  

The Wall Street Journal wrongly reported this morning that Rent-A-Center threatened to end its financial support of America’s Second Harvest unless the endorsement was withdrawn. In reality, the company asked that, if the Ohio food banks were going to be members of the Ohio Coalition for Responsible Lending, then Rent-A-Center wanted its donation to be redirected to the other 49 states “where fighting hunger was their sole purpose.”

Rent-A-Center, like any other contributor to a charitable organization, wants its donation be used for its intended purpose, not to support a group completely unrelated to the charity’s mission. According to Gus Whitcomb, VP of public affairs for Rent-A-Center, “We made a commitment to help put food on people’s tables. We don’t want our money spent on anything else.” A reasonable request.

Good for Rent-A-Center to respond so quickly and so toughly.   Wall Street Journal reporters, like most journalists, love to listen to anti-business advocacy groups and do their dirty work for them.   

Interesting discussion on a the Volokh Conspiracy blog prompted by a column, “In Defense of Usury” in the Wall Street Journal by Dean Karlan and Jonathan Zinman. 

Several of the commenters raised the challenge that nothwithstanding the authors’ conclusions, very high interest rates are still “immoral” and should be banned. But I don’t really follow the logic of the critique–if there are no externalities, and those that borrow are better off as a result, what exactly is the argument for why high interest rate loans are immoral and should be prohibited?

the first time as tragedy, the second time as farce.”  

In today’s Wall Street Journal, a story begins: 

      “Concerned that “payday lenders” and other high-interest storefront operations are improperly capturing Social Security direct-deposit payments from the elderly and disabled, the Social Security Administration said it would likely change how it delivers some benefits.” 

Wait a second.  The Social Security Administration was actually responding to this Feb. 12th Wall Street Journal piece, which confuses payday lenders with installment and other types of lenders. 

So first we have the Wall Street Journal reporting inaccurately that payday lenders are involved in certain business practices, the Social Security Administration raises concerns based on this innacurate article, and the Wall Street Journal now reports on these concerns being raised.  

The Community Financial Services Association told the Wall Street Journal in strong terms that the initial article contained factual errors.  The business paper of record essentially told the industry in haughty tones that IT will decide what a “payday lender” is.   

The Payday Pundit has decided that he will decide what good journalism is and this isn’t.

The Wall Street Journal offers advice for young adults needing a short-term loan:  get a loan from the bank of Mom and Dad.   No Plan B is suggested if Mom and Dad don’t have the cash.