Online Payday Loans

“When a bank charges $38 for a bounced $10 check, what is the ‘interest rate’ on that?”

Payday lender Bill Taylor attacks bounced check protection…
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“With payday loans, people get trapped. Every payday they’re broke. You can’t get out… We wanted to offer our members an opportunity to break the cycle.”

Nevada Federal Credit Union president Brad Beal wants to help members of his credit union break out of the cycle of debt by offering a payday loan alternative…
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“It seems to us that this bent for legislation is in response to the payday loan industry wanting to improve its position substantially from where it is now and legalize these interest charges that people are hit with… It’s very sad that people need payday loans badly enough to pay these rates.”

Consumers’ Association of Canada (CAC) president Bruce Cran comments on the Canadian Payday Loan Association (CPLA) president’s push for national regulations…
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“The only thing lacking right now… is enforcement of the law.”

According to an article entitled High Interest: Protecting the Illegitimate Profits of Payday Lenders, Canadian consumer advocate Bruce Cran believes that existing federal legislation* is sufficient but needs to be enforced.

*Under the Canadian Criminal Code, lenders cannot charge more than 60% APR.

He also has some interesting advice for Canadian borrowers who owe large amounts of interest to payday loan shops…
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“Whether or not this is the best way for people to borrow money, it’s a legitimate option in the marketplace.”

Lawyer Bruce Hallsor believes payday loans are a choice that should be made available to people who have a poor credit rating and can’t get loans from banks…
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“While the principal customer base of the payday lending industry is lower-income and lower-middle-income consumers, as a general matter these consumers must have at least a steady job, a bank account and a social security number in order to qualify for a payday loan.”

In an essay entitled Regulation and Self-Policing will Influence Consumers’ Access to Payday Loans, Washington D.C. lawyer Charles M. Horn challenges the notion that payday loan consumers are the poorest, low-income people…
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“This is really payday lending on steroids… it’s one way to keep trying to put this product out that everyone knows is toxic to consumers.”

Supermarket chain Bi-Lo’s new “BonusPay” system worries Chris Kukla at the Center for Responsible Lending…
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“This analysis suggests that… the payday lending industry has now fundamentally transformed the financial services sector catering to lower income Americans. Moreover, our findings should serve as conclusive proof that conservative Christian Americans are a prime demographic target of the payday lending industry.”

Christopher Lewis Peterson and Steven M. Graves came to this fascinating conclusion in a paper entitled Usury Law and the Christian Right: Faith Based Political Power and the Geography of the American Payday Loan Regulation.

Although the paper itself is due to be released this spring, a draft copy of the full report and raw data (including detailed maps) are available online…
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“It would be virtually impossible for Ms. Reuter, or anyone in a similar position, to obtain competent individual representation for the types of claims brought here.”

Palm Beach Circuit Judge Elizabeth Maass ruled that Florida payday loan consumers can bring claims through class action arbitration even though the payday loan contracts they signed contain a provision that forbids class-wide arbitration…
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“Just as you understand that taxi services are valuable and convenient when used for short-term travel needs but are inefficient to use for long-term travel needs, payday advance services are economical and convenient when used for short-term cash needs. But they are inappropriate to use for long-term or continuing cash needs.”

The Virginia-based payday lender trade association compares their product to a taxi…
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