CBS News report on payday lending
»Also view 60 Minutes report on payday lending.
»Also view Good Morning America report on payday lending.
Payday lenders trying end run around Arizona voters
Editorial from The Arizona Daily Star, Tucson, Nov. 29, 2009
We are appalled that the state's payday lenders and their lackeys are still seeking to bypass voters and keep the usurious industry alive.
Given Arizona's history with payday loans and voters' desire to run predatory lenders out of the state, it would be shameful if the Legislature and Gov. Jan Brewer choose to give payday lenders a new lease on life. They must not do so.
Arizona voters last year rejected — by a 60-40 margin — an industry-crafted proposal to repeal the law that prohibits them from remaining in business beyond June 30, 2010, when the state law that allows payday loans expires.
We have consistently argued that payday lenders must not be allowed to continue to do business in Arizona.
»Read more
Payday lending is history in Arkansas
Fox Television-Channel 16, August 11, 2009
LITTLE ROCK—Arkansans Against Abusive Payday Lending (AAAPL) formally announced today that the last payday lender has left Arkansas, declaring victory on behalf of all those victimized by a predatory industry that drowns borrowers in triple-digit interest rate debt.
AAAPL hosted a news conference today near a former payday lending store in Little Rock once operated by First American Cash Advance. First American, the final payday lender to cease operations in Arkansas, closed its last store on July 31. AAAPL released its latest independent research report, which highlights developments over the last year that ultimately culminated in payday lenders leaving the state for good.
The formal end of payday lending in Arkansas occurs eight months after the Arkansas Supreme Court ruled that a 1999 payday lending industry-drafted law violated the Arkansas Constitution, and 16 months after Arkansas Attorney General Dustin McDaniel initiated a decisive crackdown on the industry. Payday lenders charged borrowers triple-digit interest rates – despite the Arkansas Constitution’s interest rate cap of 17 percent a year on consumer loans. The industry-drafted Check-cashers Act as enacted in 1999 was designed to evade the Constitution by contending, nonsensically, that payday loans were not loans.
Editorial: Regulation needed on payday loans
The state of Wisconsin has virtually no laws regulating payday loan operations. It's time these establishments were brought under control.
Green Bay Press Gazette, July 31, 2009
State Rep. Gordon Hintz, D-Oshkosh, says he has 43 co-sponsors in the Assembly, and 15 in the state Senate, for his bill that would set a 36 percent ceiling on the interest that payday lenders can charge. That's the ceiling that Congress set on loans for U.S. military personnel in 2007 after many servicemen and women got caught in the debt trap set by lenders near their bases.
Generally speaking, these operators have borrowers write a post-dated check that includes the loan amount plus a flat fee. An often-used example is that the customer pays $300 and receives $255 in cash; the rest is the company's fee. The lender cashes the check in about two weeks, usually coinciding with the borrower's payday.
The Center for Responsible Lending, the consumer group that has led the charge against these practices, recently estimated that three-quarters of payday-loan companies' business is with people who find they have to turn around and borrow money again within days, with another exorbitant fee attached. Hintz told about a constituent who set out to borrow $600 and eventually paid $2,500 in fees.
"Their business model is setting people up to fail," Hintz said.
»Read more
Faith-based groups say biblical call guides payday-lender campaign
Catholic News Service, July 24, 2009
By Dennis Sadowski
WASHINGTON – The Rev. Mitchell Kent knows about the risks of payday lending very well – to the tune of $5,000.
Those risks include loan fees that add up quickly, fees that faith-based and consumer groups pushing for reform of the industry say are exorbitant and akin to usury.
For the Columbus, Ohio, minister, it all began about nine years ago when he needed $100 to pay a utility bill. With no cash in hand but a secure paycheck just two weeks away, he walked into one of the city's proliferating payday lending stores. Within minutes he had cash, underwritten by a personal check dated two weeks into the future. The $15 fee seemed worthwhile.
"It was so easy to get the money in advance. It was a godsend," he said.
Two weeks later, when the loan came due, Rev. Kent had already spent his next paycheck on another bill and the check he wrote to cover the original loan bounced. So he took out another two-week loan to pay off the first. Two weeks later it was more of the same. Eventually, he said, he'd go from store to store to cover the cost of each subsequent loan.
»Read more
Identity thieves use payday loans to make a quick buck, authorities say
Contract worker stole personal data on 2,100 AT & T employees, racked up $70,000 in loans, officials say
Chicago Tribune, July 21, 2009
By Jeff Coen
The first clue that Karen Milligan had been victimized by identity theft came with a call from a company that offers fast payday loans over the Internet.
"I said, 'No, I didn't apply for any loan. That doesn't make sense,' " said Milligan, who recalled flashing from bewilderment to alarm as she tried to figure out what was going on.
A contract worker hired by Milligan's employer had stolen hundreds of co-workers' Social Security numbers and other personal data while on the job and used the information to take out quick $1,000 loans online in dozens of the employees' names, officials said.
Investigators said the case highlights how few safeguards exist with payday loans and how easily identity thieves can use the companies to make a quick buck and stay undetected – at least until the bills come due.
»Read more
Virginia loan program hopes to curb predatory lending
Associated Press
By Dena Potter
July 13, 2009
RICHMOND, Va. – Virginia will offer state employees short-term loans up to $500 in an effort to prevent them from turning to payday or car title lenders during tough economic times.
Gov. Timothy M. Kaine announced the Virginia State Employee Loan Program on Monday. It offers non-probationary employees emergency loans with no credit checks and no late fees at an annual interest rate of about 25 percent.
Payday and car title loans charge borrowers an average of 365 percent annual interest.
"If the people who are employed are having to pledge their paychecks to predatory lenders have a better option, I think they'll use it," Kaine told reporters.
Borrowers must belong to Virginia Credit Union and have at least $5 in a savings or checking account. To qualify for a loan, participants must successfully complete an online financial course and a 10-question financial literacy exam.
Loans come due in six months, with payments through direct debit from the employees credit union account. Employees can have only one loan at a time and two per year.
Good Morning America (with video)
Payday Loans Vicious Cycle: Desperate Americans Turn to Advance America
'GMA' Gets Answers for Two Women Struggling With the Burden of Payday Loans
ABC News, Good Morning America
May 26, 2009
Laura White, from Mullins, S.C., is 66 years young, and lives on a $575 a month Social Security check.
A few years ago, her old car needed repairs which she couldn't afford and, since she uses the car to take her epileptic daughter to the doctor, White became desperate.
"Things was tough. I needed money so, that's what I had to do," she said. "I wasn't getting enough." White's solution was one that over a million Americans have turned to: Advance America, the largest payday loan company in the United States.
It seems simple enough: Demonstrate that you have a job or a steady income, and Advance America will loan you money, for a fee of $15 per $100 borrowed.
White borrowed $300 from the company, which made $676 million in revenue in 2008 and has 2,800 U.S. locations. She agreed to pay that loan back -- plus the $45 fee -- as soon as her next Social Security check arrived. The fee was equal to a 163 percent annual interest rate on the loan.
But when White got paid next, she had a problem. As often happens, she once again found it impossible to pay her bills and pay off the loan, so she had to borrow an additional $300 against her next check. And she says she was "hooked."
»Read more
I-Team investigation: Payday loans in Ohio
WTVG Toledo, Ohio
May 19, 2009
There's a new battle over payday loans. The I-Team found stores in Toledo charging up to 15 times more than the limit voters approved in November.
After lawmakers passed the new payday loan law, stores found themselves at a fork in the road. They had a choice: take out licenses under the new payday loan law capped at 28 percent APR, or apply for licenses under two older laws which allowed the stores to charge as much as 350 percent including fees and interest.
Jeff Dillman couldn't believe his eyes when he discovered payday lending stores all over Ohio were at it again.
»Read more
Hundreds in Kentucky back crackdown on payday loan companies
Louisville Courier-Journal
March 24, 2009
By Emily Udell
LOUSIVILLE – 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 $131 million in fees from Kentuckians a year.
Several state legislators said at last night's meeting that they did not support a bill that passed the Senate this year that would require a state database to track payday loans to ensure that people borrowing from the high-fee lenders have no more than two loans from them totaling no more than $500.
"I voted against that bill because it was a timid bill that would not have helped the people," said state Sen. Perry Clark, D-Louisville.
Several legislators said that 36 percent might still be too high a figure, and many urged attendees to rally on the issue in Frankfort next year.
»Read more
Texas legislators say payday loans need oversight
El Paso Times
March 24, 2009
By Brandi Grissom
AUSTIN – Texas lawmakers must regulate payday and mortgage loans to prevent more families from falling into financial ruin as the economy continues to slide, a group of Democratic state senators said Monday.
"In times like these, hard-working Texas families are more susceptible than ever," said state Sen. Wendy Davis, D-Fort Worth.
Davis and state Sens. Eliot Shapleigh, D-El Paso, and Rodney Ellis, D-Houston, called on lawmakers to approve a package of bills to reform subprime mortgages and regulate payday loans and tax refund-anticipation loans in Texas.
As the Texas economy worsens and families struggle to make ends meet, the lawmakers said, more Texans would fall prey to high-interest mortgages and payday loans with annualized interest rates of up to 1,000 percent.
The Dallas branch of the Federal Reserve Bank has estimated nearly 300,000 Texas jobs could be lost this year.
»Read more
Bill to tighten restrictions on payday loans filed in the Missouri House
St. Louis Post-Dispatch
March 20, 2009
By Roseann Moring
JEFFERSON CITY — Arthur Crawford of St. Louis couldn't pay his bills. So he borrowed $300 in a short-term arrangement known as a payday loan.
But other things came up, he said. He's taking care of two teenage daughters and paying child support on another. Things don't always fall right into place.
He found he couldn't pay back the payday loan on time. He could renew it, but that would significantly increase the amount of money he had to pay. It ended up taking him about five months to repay the loan, and he said he paid about $500.
He said he should have gone to the bill collector and worked something out rather than deal with a payday loan company.
"I think those are loan sharks," he said.
Because of complaints from people like Crawford, Missouri lawmakers are looking at overhauling the laws that govern these loans.
»Read more
Credit counselors unanimous: Payday loans harm Coloradans.
»Read the press release
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Bill to tighten restrictions on payday loans filed in the Missouri House, St. Louis Post-Dispatch,
March 20, 2009
Payday lending bill headed to Virginia's governor,
Feb. 25, 2009, The Associated Press
New Virginia crackdown on payday lenders takes shape, Richmond Times-Dispatch,
Feb. 23, 2009
Nebraska payday lending bills target industry, Lincoln Journal Star,
Feb. 23, 2009
Ohio payday lenders finding loopholes, Ashland Times-Gazette,
Feb. 23, 2009
Fixing Ohio's payday-loan law is legislators' job, state says; Agency suggests it can't stop lenders from using older statute, The Columbus Dispatch, Columbus, Ohio, Feb. 20, 2009
Paycheck advance chain pays millions in Washington settlement, KREM TV, Spokane, Wash., Feb. 18, 2009
Ohio lawmakers consider beefing up payday law, The Columbus Dispatch, Columbus, Ohio, Feb. 18, 2009
High-cost lenders profit from desperate times, The Dallas Morning News, Dallas, Texas
Feb. 16, 2009
Utah payday lenders fighting plan to cap interest at 100%, Deseret News, Salt Lake City, Utah,
Feb. 15, 2009
South Carolina House OKs Payday Lending Bill, The State, Columbia, S.C.,
Thursday, Feb. 12, 2009
Efforts under way to restrict payday loans, The Olympian, Olympia, Wash.,
Feb. 11, 2009
States take on debate over payday loans, Seattle Times; The Associated Press,
Sunday, Feb. 8, 2009
Credit counselors: Avoid costly payday loans, Rocky Mountain News, Feb. 5, 2009
Washington state lawmaker takes on payday lenders, The Columbian, Clark County, Wash., Feb. 1, 2009
Payday lending bill set for fast track in South Carolina House, Associated Press, Jan. 27, 2009
Krupa Proposes Payday Loan Bill, Peoria Journal Star, Jan. 12, 2009
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