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27January

Tension Sparks Between Missouri Groups

By: Mary Ann Tate Category: Missouri Payday Loans
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The Missourians for Equal Credit Opportunity, an advocate for payday lending industries, issued a legal notice which threatens the people of Missouri for Responsible Lending of fines with jail. The latter group is currently composed of clergy persons and faith-based organizations that are pushing for a ballot initiative to reform short-term consumer lending in Missouri. The notice is said to have sparked more tension for these two opposing groups.
“In its letter, the law firm claims faith-based groups that circulate the petition to collect signatures could be in legal trouble in two ways. Those who circulate a petition “knowing it to be false” could be guilty of a Class A misdemeanor, punishable by up to a year in jail and a $10,000 fine.”

 

27January

Making Money From Payday Loans

By: Mary Ann Tate Category: Instant Payday Loans
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According to the National People’s Action report, payday lenders make billions from borrowing consumers. Payday lending companies target middle – class and lower – class income borrowers. Reports show that borrowers usually take out nine repeat loans per year with an interest rate as high as 400 percent. When they default, which usually happens, they are often pushed ever closer to poverty.
“One borrower’s poverty is a payday lender’s profit. The report finds that lenders “take at the very least $3.4 billion” from low-income communities every year in fees alone.”

 

27January

Credit Options – Not Elimination of Payday Loans

By: Mary Ann Tate Category: Missouri Payday Loans
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Here is another point of view from Gerri de Guzman, executive director of Consumer Rights Coalition, regarding payday loans. He said that most people, especially Missourians, rely on short-term loans to make ends meet. A move to cap the payday and installment loans at 36% interest rate would eventually lead to the elimination of these types of credit options. Instead, he urged people that before signing the petition, Missourians should also consider the general consumers.
“If you were to ask any of our 10,000 members if they want Missouri to eliminate their short-term credit options, they would tell you that, in this dismal economy, they would like policymakers to expand, not eliminate, the credit options available.”

 

26January

Caution on Payday Loans

By: Mary Ann Tate Category: Uncategorized
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Here is a consumer alert message from the Office of the Federal Trade Commission. The message cautioned the public on the dangers of succumbing into payday loans. Instead, the Commission encouraged the consumers to re-evaluate their options and check for alternatives to payday loans.
“The bottom line on payday loans: Try to find an alternative. If you must use one, try to limit the amount. Borrow only as much as you can afford to pay with your next paycheck — and still have enough to make it to next payday.”

 

26January

Lawsuit Against Filed Internet Payday Loan Websites

By: Mary Ann Tate Category: Arizona Payday Loans, Missouri Payday Loans
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Attorney General Dustin McDaniel (Arizona) filed a lawsuit against Josh Mitchem (Missouri) and his companies: PDL Support LLC and Platinum B Services LLC because they allegedly violate the laws.  McDaniel is strong in his conviction that these companies offer loans exceeding annual interest rates, Mitchem maintains that they are not payday lenders.

“These usurious practices are just as illegal when offered on the Internet as when they were offered from storefronts in Arkansas. “

http://www.bizjournals.com/kansascity/news/2012/01/24/arkansas-attorney-general-sues-over.html

 

25January

Cash cards, a glimmer of hope?

By: Mary Ann Tate Category: Uncategorized
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Walmart, the new cashier seems to be competing with payday lenders. They claim to provide easier services to people who have limited or no access to banking services. Cashing of tax refunds to low-income earners will help WMT to gain more popularity. Walmart is introducing their MoneyCard cash cards which permits low-cost option of direct deposit to the prepaid cards for the unbanked. These cards can be used to pay the bills, or to make essential purchases. Cash cards are better than payday lenders. They definitely offer a better option for the unbanked, but not a long-term substitute for a good checking account.
“In the case of Walmart’s card, ATM transactions cost $2 each while a standard reload costs $3. There’s also a $3 monthly fee for carrying the card.”

http://www.dailyfinance.com/2012/01/19/cashing-your-tax-refund-without-a-bank-account-just-got-easier/

 

24January

Payday Lenders Compared to Hurricane

By: Mary Ann Tate Category: Uncategorized
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Since the beginning of the new regulations restricting the interest of pay day loan lenders in America, a majority of them have complained about how unfavorable these laws are to their Industry and citizens who use payday loans in desperate times. Many past customers of these pay day loan lenders have testified about how the loans helped them, while others have compared it to a hurricane.
“When a storm hits, and people are desperate and in need, you can’t charge $8 for a gallon of gasoline. We have anti-gouging laws and every day is like a hurricane when you are living on the edge,” said Stetson, an advocate for the poor.”

 

24January

Senators Support Payday Lenders

By: Mary Ann Tate Category: Uncategorized
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The people of Maine are beginning to wonder why the two main senators, Collins and Snowe are not fully behind the new financial policy that restricts payday loan lenders. It has also been reported that the state also allows advertisement from payday lenders outside the state. This brings the question as to why the senators are doing nothing to support the policy.
“Maine’s Sen. Susan Collins, who objects to Obama’s action, admits the goal of her colleagues’ refusal to allow a confirmation vote of any director was to keep the agency from functioning”

 

23January

A Payday lender backing MP’s call to cap high-cost credits

By: Mary Ann Tate Category: Uncategorized
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GaryMiller-Cheevers, chief executive of a payday loan firm pledged support for the campaign led by the labour MP to cap high-cost credits. The House of Lords will discuss the payday loan issue. According to Miller-Cheevers, the one solution to payday loans is to introduce the cost of loans in monetary terms, rather than APR or EAR. These terms can be confusing to many customers and often misleading. The transparency for all types of loan borrowing is also important. This could help people understand the exact cost of their payday loans.
” Campaign follows a period of intense public scrutiny around high-cost credit, with charities and trade bodies expressing concerns that credit products such as payday loans can push consumers into an unsustainable debt spiral if used incorrectly”.

 

23January

AEA advocates for a level playing field

By: Mary Ann Tate Category: Pay Day Advance Loans
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Eventhough the CFPB has a director,it doesn’t change anything around AEA and its services. With the appoinment of Cordray, nation’s largest payday lender’s stock price dropped. The company offers cash advance services with an APR of 391%. Prior to the creation of CFPB the Advance America always operated in strict compliance with all applicable laws. According to the Vice President of Public Affairs at AEA, they are looking forward to working with the bureau while developing a regulatory framework for consumer financial services. AEA’s payday model is quite a simple operating concept where capital is the driving product and labor is the largest expense. They vow to provide transparent services and still continue to have a successful lead in the payday loan industry with their net income shooting upwards.
 ”AEA reported an almost tenfold earnings increase from the same quarter a year ago. The company’s net income for the quarter was more than $14.5 million; compared with $1.4 million during that same quarter a year ago”.

 

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