Financially Desperate People Turning to Payday Lenders
10/01/08, Las Vegas Now
experts say taking out a payday loan can have an adverse impact on credit over the long term
Payday-Lending Supporters File Additional 218,000 Signatures
10/01/08, Columbus Dispatch
Payday lenders want voters to cast a "no" vote on Issue 5, which would allow them to continue imposing annual percentage rates of 391 percent on payday loans.
Financial Education a Must in Every School in the U.S.
09/29/08, Seattle Post-Intelligencer
The current crises in the housing, mortgage, and stock markets drive home the need for financial education in U.S. schools
Banks Offer Payday Loans in FDIC Experiment
09/17/08, Cleveland Plain Dealer
The Federal Deposit Insurance Corp. has launched a pilot program as part of its campaign to develop more palatable ways to deliver short-term funding than through payday lending, which can charge interest as high as 390 percent. As part of the pilot, 31 banks across the nation since January have issued 3,000-plus small loans--worth no more than $2,500 each--that are governed by FDIC rules limiting interest to 36 percent. The goal is to determine how to make the loans profitable enough that more commercial banks, including large institutions, will be willing to begin marketing them. The banks issued 3,140 loans in the first three months of the year--roughly half of which were for less than $1,000. The average term was 10 months and the average annual percentage rate was 15.05 percent. The early results suggest "that these are customers who have some kind of roots, some kind of stability, people who are demonstrating an ability to keep making payments," according to the American Bankers Association's Wayne Abernathy.
Columbia, Other Cities Join Legislative Assault Against Payday Lenders
09/09/08, Columbia Free Times
The South Carolina Legislature sought this year--ultimately, without success--to tighten control of payday lenders, but action against the industry is still underway at the local level. The municipal governments in Rock Hill and Greenville, for instance, have already moved to prevent payday lenders from concentrating in particular communities. Now, the city of Columbia says it may craft an ordinance modeled after Greenville's 2006 law--which compels a payday lender to relocate once its lease is up if it is situated within 3,000 feet of a similar business or title lender. Greenville's city manager, Jim Bourey, says the measure has cut the number of payday lenders there roughly in half. City councilors in Columbia will take up the matter at their Sept. 24 meeting. In the meantime, the effort to rein in payday lending statewide likely is not dead. A key House lawmaker blocked a Senate-approved bill from reaching the floor of the lower chamber; but several senators anticipate that the Legislature will take up the issue again next year
Some States Set Caps to Control Payday Loans
09/06/08, New York Times
Tracey Minda needed cash to buy clothes and school supplies for her 6-year-old son before the 2006 school year. A preschool teacher and single mother, she was broke after making her mortgage and car payments. The quick and easy answer was a $400 loan from a payday lender. When payment was due two weeks later, she needed another loan to keep afloat. Nine months and 18 loans later, she was hundreds of dollars in debt and paying the lender about $120 in monthly fees from her $1,300 in wages.
Out-of-State Payday Loans Must Adhere to State Rules
09/05/08, Minneapolis Star Tribune
The Minnesota Department of Commerce will require out-of-state payday lenders to abide by the same legal and licensing requirements as in-state companies beginning on Dec. 1, and violators will be forced to close up shop. Kevin Murphy, deputy commissioner of state-licensed financial institutions, says payday lenders with offices in the state have not been the subject of many consumer gripes, but he notes that complaints have been pouring in about out-of-state payday lenders that have an online presence and that may be imposing "higher-than-legal fees." Many states have introduced interest-rate caps on payday loans, but Minnesota lawmakers failed to approve legislation that would have implemented a 36-percent ceiling on the annual percentage rate (APR). Currently, the state's small-consumer loan law restricts APRs to a whopping 390 percent.
Ballot taking shape on Ohio's new payday-lending law
08/15/08, Blade Columbus
COLUMBUS - In perhaps the first battle of the Nov. 4 election, both sides of an effort to keep a new payday lending law from taking effect managed to inflict a few wounds.
Ohio critics question payday signatures
08/13/08, Zanesville Times Recorder
People gathering petition signatures to help repeal one of the nation's toughest payday lending laws are misleading voters, critics said Tuesday.
States Imposing Interest-Rate Caps to Rein In Payday Lenders
08/09/08, Wall Street Journal
As subprime mortgages continue to demonstrate the damage to borrowers and the economy when risky loans are made to sometimes unsophisticated consumers, politicians who once steered clear of limiting the availability of credit now find "fair lending" laws that cap interest rates more palatable.
