“Fifteen is the magic number… Once it gets below $15, the attractiveness of the product goes away exponentially, given the fact that loan losses can be quite significant.”
Equity analyst Daniel O’Sullivan believes that a payday loan shop must charge a minimum of $15 per $100 borrowed to remain profitable…
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“The government of Manitoba has taken a very socialist attitude of where they want to go… Why are they regulating us? Are they telling Wal-Mart what to charge? Are they telling anybody else what to charge? It’s a free market.”
Payday lender Leo Sorensen believes that the government has no place telling a business what it can charge its customers. Sorenson, who in the past has compared the payday loan business to prostitution, claims he has every right to charge borrowers interest rates of more than 700% APR and even suggested that some of his customers may resort to stealing to pay bills if payday loans were not available…
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American Association of Debt Management Organizations (AADMO) members include consumer credit counseling agencies, debt management organizations, credit counselors, personal finance educators, credit and debt information educators, credit counselors and consumer lawyers.
Note: AADMO members include both Non-Profit and For-Profit Debt Management Organizations.
If expensive credit card payments or consumer loan fees are eating up a large part of your paycheck, AADMO members can give you an opportunity to pay your bills while getting the breathing room from your creditors to establish a sustainable budget…
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National Foundation for Credit Counseling (NFCC) member agencies offer Consumer Credit Counseling Services (CCCS) to help consumers achieve financial stability. Member agencies are all nonprofit and community-based.
If payday loans have put you on the debt treadmill, NFCC members can provide financial education and counseling to help you manage your debt…
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If you are visiting our site from Canada (eight percent of our visitors do) and have found yourself on the debt treadmill (a common payday loan pitfall), Credit Counselling Canada (CCC) can help you find a credit counsellor in your area. Credit counsellors can explain your options regarding negotiated payment plans with creditors…
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“Despite the demand for basic financial services, access to banks has become more difficult over time for many consumers. Many banks have chosen to close their less profitable or lower-traffic locations. Typically, these closings have occurred in lower-income neighborhoods where the branches have failed to attract a sufficient base of customer deposits. This trend has resulted in fewer convenient alternatives for basic financial services in many neighborhoods. Many banks have also reduced or eliminated some services that under-banked consumers need.”
According to Dollar Financial Group’s 10-K filing, demand for payday loans has increased because traditional financial institutions have turned their backs on lower-income neighborhoods…
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“People who are most vulnerable — on the low end of the income scale — are often targeted by payday lenders. And this hasn’t been a high enough priority.”
Canadian MP Judy Wasylycia-Leis has lobbied for federal regulation of the payday loan industry for years but believes the issue has not been a high political priority because it affects people with a low income and exists in a legal gray area…
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“It’s all about consumer protection, and anywhere where there’s lack of controls, there’s people that are taken advantage of…”
Alberta minister of government services George VanderBurg believes the federal government should regulate the payday loan business in Canada…
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“The payday lending industry is not very risky in the way that we usually think of risk in financial institutions. The lending portfolio is very diversified in the form of many very small loans, and hence the loss rate is reasonably stable.”
Finance professor Chris Robinson puts a dent in payday lenders’ claims that high fees are justified by high risks…
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“As more Canadians make use of payday lending, Canada’s New Government is taking steps to ensure that the industry can be properly regulated.”
Canada Justice Minister Vic Toews wants to amend the Criminal Code to give provinces the power to regulate the payday loan industry…
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