House Bill 239 Payday Loan Battle

Written by David Schmidt. Posted in Legislation

House Bill 239 LA payday loan billIn Louisiana and other states in the south, the battle between the public defenders and politicians / watch dog groups versus the payday loan industry has heated up. In recent months it seemed that there was no fight left in the payday loan industry. In many states the industry is endorsing bills that pass regulation in an effort to come to a consensus and prevent a wholesale change to their way of life. However, in the southern states, they sometimes have a kick of resistance left in them.

The most recent death of House Bill 239 from Representative Ted James of Baton Rouge has serious implications for the state of the payday loan industry in the south. Even if it is a strange victory in a sea of defeats, it is a victory that comes on the heels of a number of studies that should have swayed public opinion in the other way. One of the main reasons it has not is because the payday loan industry is finally using an argument that is true and works; so many people need payday loans in order to survive.

Poverty Stricken Payday Loans

In states like Louisiana, it is not hard to find poverty stricken neighborhoods and regions. Inner city Baton Rouge and New Orleans provides plenty of urban areas that are full of poverty while there are country towns and villages that don’t do much more than farm small plots of land. Both rural and industrial are struggling in Louisiana, which is the perfect recipe for taking out small loans when the emergencies hit.

Unfortunately, emergencies hit often and they lead to a payday loan debt trap, which can last for many months and even years. The average length of debt from a payday loan has reached six and a half months, which is definitely higher than the few weeks most often touted. The biggest problem for politicians is that the payday loan industry now has a valid point. In reality, many of the poor people in Louisiana would not be able to survive without the loans.

There is now a reason for the politicians to keep payday loans for the poorest people who are alive. Making them cheaper or restricting their ability to lend to people makes it harder for poor people to get money, which obviously grows the burden on the state. Many politicians would rather have the burden on these small private companies that make a lot of money if they are successful.

Treatment Changes and Payday Loans

A lot of politicians are coming out in favor of better treatment and conditions for those who are in payday loan debt, however. The vast majority of men and women who take out these loans get harassed on a regular basis from payday lenders, which is problematic for many reasons. If a new bill were to enter the House of Representatives in Louisiana, it should focus more on the role that politicians have to protect people from harassment and from violence rather than change their financial habits.

Changes in the South for Payday Legislation

Written by David Schmidt. Posted in Legislation

There are a lot of payday loan laws across the United States and even in similar countries like the United Kingdom. Looking at the different laws helps to see what has worked and what does not. In the example of drugs, Portugal was a famous country that decriminalized drugs altogether and found tremendous results. In the United States, looking at this drug law has made a huge difference in our own understanding of the problem.

When it comes to payday loans, a similar mentality can be taken. It is a good idea to look for the changes to the southern way of life to see whether or not it is useful to regulate the industry. However, it is important to look at the other legislation that has occurred in states nearby. When looking at the other states, one can clearly see that there is legislation that works well and regulation that has not led to much.

Arguments for Payday Regulation

There are many good arguments for payday loan regulation, but New York is not one of them. In this state, the payday loan industry has been removed completely from existence. No high fees and regulation is crippling to anyone in the industry. Still, the internet age has allowed many people to get into high rates of debt that they must pay off or face problems. Even though the New York state has prevented a lot of companies from operating in brick and mortar locations, the online payday loan companies are sucking money out of the state and it is impossible to make a change.

This is the kind of blanket regulation that is not only causing New York to lose out on revenue from taxes, but is also having the money sucked out and people are finding other ways of getting loans to stay alive. The human being is a very intelligent entity when backed into a corner. When people need money fast in order to survive, a state law will be unable to keep up with the methods used to acquire this money. It also pushes many people to underground loan sharks that can be violent despite breaking the law.

There are other arguments in favor of regulation, such as some of the caps of interest rates on payday loans. This allows people of low socio-economic status to get the money that they need in order to survive, but it limit how much they are going to be charged. States like Alabama and Mississippi have utilized this approach well in recent years.

Overall, there is a lot of room that the payday loan industry can make in order to impose their will, but public opinion is swaying in one direction only. The only thing that public opinion needs to do in order to make the right decisions is analyze what other states have done and find the best methods for them. Combining the best results will offer the best legislation and a continued experiment in this financial industry.

Minnesota Payday Loan Statistics

Written by David Schmidt. Posted in Payday Loan Laws

MN payday loan StatsA new report of payday loans in Minnesota showed a few very important statistics for the people of this state. Many of them have been abused from the years 1999 to 2012 and according to state officials it reaches nearly $85 million dollars over that period. It is yet another question in many peoples’ mind about whether the payday loan industry is actually helpful.

There are millions of people who find themselves in some type of debt or another, but payday loans are some of the worst types of loans one can take. For cash strapped individuals with little or no credit, the payday loans are unfortunately the only thing that they can use.

Minnesotans and Payday Loans

It has come to the attention of many politicians and legislators that Minnesotans are on the receiving end of some serious financial drain. The Minnesotans for Fair Lending have devised study to show that there have been $82 million lost to the payday loan companies from people that barely have any money to begin with. This group includes a huge variety of different people including labor leaders, religious, and credit units, which hope to alter state law.

In 2012 alone there were 84 storefront locations in Minnesota that were able to raise over $11.4 million throughout the state. That is a lot of money in just the profit alone. Take into consideration that 2012 was one of the worst years for financial markets and many people lost their homes among other things. The people who lost so much were almost forced into bankruptcy because of these payday loan interest rates.

The Joint Religious Legislative Coalition (JRLC) has complained bitterly for the payday debt cycle (also known as a payday loan trap), which has brought down so many people who are in Minnesota. The vast majority cannot handle the debt burden and thus continue paying small chunks of interest for many months or years.

Reform in Minnesota

As a northern and more liberal state, there is a good chance that Minnesota will reform the payday loan industry. While every state has major political contribution problems, it is evident that Minnesotans are pushing legislators to reduce the interest rates allowed for payday loans or just abolish them altogether as New York state has done.

Reform may not come as quickly as some people would like, but it will nonetheless be an effective method of getting Minnesota to change the ways that have cost $82 million over the last few years. Many of the poor people in urban St. Paul and Minneapolis will he thankful for these changes.

Payday Loan Debt and Tambu’s Story

Written by David Schmidt. Posted in Payday Loan Debt

A Story about payday loan debt

Many of our clients are single moms who are just trying to make ends meet.

There are millions of people who suffer with payday loan debt every single day. The New Yorker recently did a piece on a typical woman who utilized these loans and has found it incredibly difficult to maintain. Her name is Azlinah Tambu and she is a 22 year old single mother who is living in Oakland California.

Finding herself in a tough situation, Tambu had to take five payday loans from five different lenders so that she could fix her car. This is a typical story that occurs to so many people in the country and it is something that many legislators are worried about.

Tight Spot for Payday Debtors

Tambu was in an incredibly tight spot because she needed her car fixed in order to get to work and drop off her child at the daycare. She knew that there would be many difficulties in paying off the payday loans because she needed her actual paycheck to pay for rent and utilities. Unfortunately, she was not anticipating the type of trouble that she was going to have with these lenders.

In the state of California, there is no legal “roll over” where a lender can refinance loans. Tambu had to pay back the first loans, but she then needed to take out more money from the same lenders and incurred even more fees. Lenders tried to withdraw money from her checking account, but she had almost nothing that they could take. When they tried, she over drafted and was charged with over $300 in overdraft fees.

The account fees were quickly paid and she closed the bank account. She is still struggling to pay off the lenders that helped her with the car.

This is exactly what many people in the industry are trying to do because they can gain so much from them. At the end of the day, it is important to remember that the people who are struggling with these loans are not only being taken advantage of in certain situations, but they are also having their life completely ruined.

For a single mother taking care of a child at the age of 22, it is arguably exploitation to have payday loans with such outrageous fees. Although $15 is not really all that expensive for every $100 borrowed, it can still add up to a lot with 15% interest every few weeks.

Tambu’s Aftermath

Unfortunately, the story for Tambu has not gotten any better. She visits all 5 payday lenders to provide approximately $40 to each in order. When asked whether they should be illegal, she quickly responded that they should not. In fact, she is working so hard to pay them off so that she can utilize them later on if needed.

At the end of the day, it is very important for some of these people to be able to get their hands on money even if it is not in their best interest. But you have to make sure you can pay these back quickly.

Payday Loan Advertising Laws

Written by David Schmidt. Posted in Payday Loan Laws

online payday loan ads

How many of these ads have you seen?

When cash strapped individuals look for money, there are few places they can turn without needing some type of collateral or credit. One of them is payday loans and advertising laws have been a major part of the industry’s fight to get more customers and make more money. Many people feel that payday loans are a necessary evil and that most people do not want them, but it can save lives in certain situations. Even people who struggle with a payday loan trap often defend them as life savers despite the cost.

When it comes to payday loan advertising, there are a few laws in place that might make a difference when it comes to places that you see them. In fact, sometimes the advertisements will skirt the law and make it a lot harder for states to avoid payday loans in their state.

Internet Payday Loan Advertising

For states like New York, payday loans are just too much for the populace to handle. They have high interest rates, they lead to extortion interest rate payments, and they are often crippling to many people who take them. In some cases, they even lead to suicide and other physical harm because of the money involved. Either way, the fact that New York has banned payday loans does not mean that it has gone away. Far from it, in fact; New Yorkers see online advertisements for payday loans all the time.

Even though there are laws in place that avoid New Yorkers from taking payday loans at a brick and mortar location, that doesn’t mean they cannot go to online payday loan websites and get the loans that way. This is exactly what many citizens are doing and it is completely skirting the law that bans the loans in the state itself.

Whether you are in a state like New York or one that allows payday loans, you will find that internet marketing by payday loan companies is very competitive. There are plenty of sites that offer a lot of money and without a single background or credit check. These typically are given with extraordinary interest rates and it is a shame that people fall victim to their marketing.

Allowing Advertising for Payday Loans

A lot of legislators want to avoid advertising for payday loans on and offline. Many billboards attract customers and even some sporting events get sponsored by companies that offer payday loans. The majority of people who are watching certain events will need money and advertising for payday loans can be a huge problem.

Anyone who has fallen victim to the payday loan trap with advertising will find that it is a bittersweet feeling. Most people do not enjoy that they are in a situation where they owe so much money, but other people can’t help it. Unfortunately, until legislators change advertising laws for payday loans, it will be possible for people to get money over the internet very easily. When you do get a loan make sure its something you can pay back quickly or you could fall into the payday loan trap that most people fall into. If this is the situation let us know so we can get you some help.

How to Handle Loan Sharking

Written by David Schmidt. Posted in Payday Loan Debt

dealing with loan sharks

Dealing with loan sharks can be so stressful

A lot of people who end up in payday loan debt do not realize that there are things one can do to protect themselves from being accosted by loan sharks. Even though the payday loan industry does not enjoy the term loan sharking, it is true that they actually work within a framework that can be considered very similar to such a description.

It is in your best interest to know how to prevent loan sharking and handle these debt collectors as best as you can. Using the following article, you should be able to handle loan sharking in a much better way and prevent yourself from running into problems down the line.

Loan Sharking Legal Protection

What a lot of people do not realize is that there are many legal actions one can take to prevent people from harassing them about outstanding debt too much. One of things that people can do is to speak with law enforcement if there is any kind of threats being made. If there are no assets that have been put up for your payday loans (which is usually the case), then there is nothing a payday loan company can do in order to force you to pay.

Not only should you not listen to these threats, but you should seek legal counsel as well. Given the psychological impact of the fear associated with these threats, it is a good idea for you to consider speaking with someone who can protect you and maybe even help to prevent it from happening in the future. You can also seek help on the FTC’s website or your local attorney general office.

Paying Debts with Consolidation

A lot of times it is one thing to be harassed in an illegal way and another to just have a constant stress of debt that must be paid. In some situations you can help yourself out by just speaking with a payday loan consolidation company about getting help to improve finances. One way of doing this is to get a payday loan consolidation expert who has the contacts and the knowledge to get a lower rate on your bill and help you out in many other ways.

Most of the time, you will find that payday loan consolidation is a great way of handling debt without causing a lot of problems. By far the most important thing for you to consider is a method where you are actually able to handle the debt burden in a much more consistent and easy manner. Then you can utilize your paycheck to pay off a lower interest rate and get the debt off the balance sheet.

Most people do not realize the implications of a high debt burden on credit and other things that can happen. If you are struggling to find out methods where you can pay off your debt and avoid a loan shark, getting a consolidation of some sort is definitely a good way of going about things.

Payday Lending Study Sheds New Light on Industry

Written by David Schmidt. Posted in Payday Loan Debt

The payday loan industry is one shrouded in mystery and secrecy from the inside. On the outside looking in, it is vilified as one of the worst industries that take advantage of a variety of people in all walks of life. However, the Community Financial Services Association of America has covered a recent study that indicates another face altogether.

The New York Federal Reserve Bank did a survey / study on the use of payday loans and found some astounding facts. The following analysis of these facts might help a skeptic to understand how payday lending is still growing popular despite political backlash.

Competing Programs and Payday Loans

There are many competing financial institutions, such as banks, that do not like the idea of a payday lending company. Not only do they put financial problems into the hands of unlicensed individuals, but they also charge far higher rates for loans without any collateral.

The study shows that banks are actually more likely to charge higher fees in some areas of their business. For example, the median price with payday lending was $27 for an overdraft while a bank with deferred deposit credit can be $15 – $100.

The flat rate for OD providers can make it even pricier no matter what size loan that you have. That can be construed as a way of making exorbitant amounts of money without needing to charge high percentage rates. They just fall as high percentages of the overall loans for the majority of those who take money out.

The report seems to debunk some of the myths about the high prices of payday loans. Even though there is plenty of bad that goes on in the industry and lawmakers are currently in the process of rectifying the system, it does not mean that it is as bad as many of the people say.

Competitiveness and Formalities

When using payday loans there are other advantages as well. Consider that time is money and you will see the added costs of formalities that banks and other institutions cause. In some situation the formalities can be very expensive not just in time but also in money. There are a lot of different payments that these institutions often want.

As far as competitiveness is concerned, few will argue that payday lenders are scrupulous owners with great rates. However, the stereotype that they are the lender of last resort with the worst possible fees seems to be overblown. Perhaps it is overblown by the very banking institutions that wish they did not have competition from the payday lenders in the first place.

USPS Butts Head with Banks

Written by David Schmidt. Posted in Payday Loan Debt

post office issuing loansThe United States Postal Service (USPS) has been around for many years and done a fabulous job delivering mail. As email has spread throughout the country and phones are more ubiquitous than ever, the USPS has had less revenue coming from typical sources. This has forced them to seek other means of generating revenue in order to keep afloat.

The latest idea includes taking on many of the lending services that banks hold dear. They have decided to enter “non-bank financial services”, which stays out of the way of banks in name, but in practice is a little bit different.

Bank Competition and USPS

The Office of the Inspector General has stated that the USPS is not going to become or compete with banks, but instead offer complimentary offerings of most financial institutions. What this means exactly is unknown, but discussion of digital currency is high on the list.

The vast majority of people who are competing in this industry know that the digital currencies are the way to go. Bitcoin and other new digital currencies are making their moves across the world and becoming incredibly popular. Because they are so independent from other currencies and they are allows to operate on the free market, it makes sense that people would really be drawn to these.

The USPS is looking for a way of seizing upon this popularity and the future before the banks can offer the services. However, there are many legalities that come into play when discussing some of the new moves on their part.

Payday Lending from USPS

There are few nice things that people say about payday lending, but the USPS is looking to get in the industry due to the favorable returns. Most people have no idea how profitable the payday loan industry really is, which is why financial institutions have started to get into the industry. They are offering more micro loans that require less red tape and collateral.

The USPS has seen the writing on the wall and is stepping up the level of time that they spend focused on such matters as well. It makes sense that they would be seeking any product that could save them time and make them a lot of money.

Even though the digital currency issue is not a big deal with banks yet, the payday lending is going to be a huge problem for a variety of reasons. If they get vilified in the same way that the other lenders do, it will definitely be a disaster for the US government that is sponsoring some of the horror stories associated with payday loans.

Whether the fight between the USPS and the banks will continue indefinitely is unknown as well, but it is apparent that banks do not appreciate what industries they are moving in to.

Utah Passes Payday Loan Legislation

Written by David Schmidt. Posted in Payday Loan Laws

Legislation on payday loans in UtahAlmost two years ago many Utah senate members were embroiled in a scandal that rocked the entire state and reverberated across the nation. A modest payday loan reform bill was stopped in the senate with tactics from many different payday lending interest groups, which led to the resignation of Attorney General John Swallow. Since then, the payday loan reform bill has gained steam and has aimed to make a change for many years.

Until recently, it was impossible to make changes due to the power of lobbying groups. Now the scandals of previous years have made it nearly impossible for interest groups to get in the way of passing legislation.

Utah Senate and Governor Legislation

So far, the Utah legislation has gone through the senate with flying colors. The specifics of the bill are modest, but they go a long way to protecting the individuals who have taken out payday loans and struggle to pay them back. Right now, the law is not as helpful for citizens who have payday loan debts, but the senate’s new bill is aiming to change all that.

The main reason it has passed so easily is due to the high majority of senators who fear retribution in the same way that scandal rocked politicians a few years ago. To avoid such scandals, many senators are convinced that passing the legislation will be a better idea.

The next step of the way is to have the governor of Utah sign the bill. Whether he does so or not will probably decide his fate in a number of ways. The lobbying groups for payday loan industries is typically very strong, but public opinion is doing a lot to sway the way these politicians are making their decisions.

Payday Loan Legislation Details

The details of the payday loan legislation in Utah are not that liberal. In fact, the bill only calls for borrowers to get time to pay off the loans without sanction or high interest rates. After 10 weeks of this high interest rate period, the legislators and politicians think that common folk need some type of break in order to release themselves from the cycle of debt.

The ironic senate vote this time around was 29 in favor and 0 against, which just shows how important public opinion can be in order to change a law. Most people know that there is a lot of power behind the payday loan companies and they want politicians to stand up to them in order to make the right decisions.

If politicians are going to be the representatives of the people, they have to listen to the people more than the companies that fund their campaigns and political ventures. It is important for states to make moves like this one in order to show the nation that payday loan legislation is not a forgone conclusion. Even if most people are cynical about the shape of the legislation today, it is possible to make a change with consistent effort towards a final goal.

Payday Loan Alternative in Mississippi

Written by David Schmidt. Posted in Payday Loan Debt

There is a constant fight between lawmakers in government and those payday lenders with the money to influence lawmaking. In the state of Mississippi there is a welcome discussion of an affordable alternative to payday loans rather than banning them or allowing them outright.

The problem with banning payday loans is that it often leaves people with fewer options and no way of getting money easily. Obviously the advantages are keeping people from getting into the payday loan trap, which can be disastrous for their life. Finding an alternative that is affordable compared to payday loans could help to prevent a lot of disaster in many households.

Affordable Consumer Credit Products

Education is one of the most important factors in payday lending and a financial institution called Southern Bancorp has started helping to offer a few unsecured lines of credit for testing purposes. The biggest part of the push is to also educate low and moderate income individuals about the risks of managing debt poorly and protecting finances.

Many people think that this education component is exactly what the industry needs. Considering it is from a financial institution that is based in the community, there is also a level of trust that would not come from a payday loan company. If you are interested in getting an education in the Mississippi area, it is possible to contact them to see whether you can get some assistance.

The small lines of consumer credit will be opened in a similar fashion as the payday loans. Typically the only way that lenders can really make money is by charging incredibly high rates for such low loans. Sometimes this can be excessive and most times the borrower does not pay. This causes a whole host of problems and requires them to charge higher rates.

Will Alternatives Work?

The question whether alternatives will work or not is a difficult one to answer. Most people suspect that it will work in a limited sense, but it will require time in order to educate people. Starting with a single state is the first step, but to get across the country and make an impact on peoples’ lives will be a lot harder. People who are in Mississippi might be able to make the right decisions for their own money in the near future, but it will not be easy for everyone to do so.

Although it is a step in the right direction, it is hard to say that it is worth more than the payday loans that are currently helping people immediately across the country. Getting people to stop using the payday lending will require some great consumer credit appeals from these financial institutions.

Colorado Payday Loan Companies Monopolize

Written by David Schmidt. Posted in Payday Loan Laws

payday loan debt in ColoradoWhen most people think of the free market economy, they don’t consider payday lenders to be such a huge part. These people and businesses typically have a reputation that is akin to loan sharking or some other negative connotation. Even though this is often true and most regulation is against these predatory loan practices, there is an even bigger problem when the entire market gets monopolized by a few certain payday lending companies. The latest news from Colorado indicates that this is a distinct possibility and one that the public needs to be aware of at all times in the near future.

Colorado Payday Loan Debt

The payday loan debt in Colorado has not changed much since 2011, but reports are showing that the number of lenders is down by 16%. That means the market share is being picked up by an ever growing few businesses that are becoming powerful. This has huge implications for the general public. As a company gets bigger, it has to worry about market share less and about fighting regulations more. Once these companies start to get really big, they will no longer have to fight one another, but will instead opt to get payday loan debt legislation destroyed.

There are many ways that this can happen over the course of the next few years. Lawmakers are hoping that the drop in the number of payday loans does not mean that bigger companies are starting the beginning efforts of expansion, but it is looking increasingly likely that this is the case.

Removing the power from these large companies is nearly impossible once they have the funds to sway legislators and contribute to campaign funds. These types of dealings with the government and legislators makes it hard to pass any kind of meaningful legislation that protects the people.

USA and Colorado Payday Lenders

The United States may be on the same path that Colorado is now facing. Payday lenders are finding it increasingly difficult to get into the business because the bigger players are growing in scale. This means that Colorado might be a microcosm for the environment that we will soon be seeing in the payday loan companies of the entire country.

For many people, this is a scary prospect. The idea of payday lenders getting bigger and more market share is a scary thought as there are simply too many ways they can manipulate legislation. As it is, there are 29 states that are currently unregulated, which means that it is very tough to get anything passed anyway!

If people are worried about legislation now, it is no wonder they are more worried about the future. With these companies earning more money, it doesn’t seem as inconceivable that they will have more power to change the legislation and fit their whims. As the public complains, they still need the quick cash, which makes it hard to regulate a service that people are using so often for their own needs. The future of payday lending might not be nearing an end with developments like this.

Montgomery Says “No” to Payday Loans

Written by David Schmidt. Posted in Payday Loan Laws

There are many places across the United States where small pockets of resistance are proving difficult for the payday loan industry to overcome. People across the country are starting to realize that even though the short term benefits might be there, the longer term impacts of debt to a payday lending company can be a huge problem. The people of Montgomery, Alabama have decided that they are going to put a moratorium on some payday loan lenders. The city council has decided through a 5-3 vote that they are no longer going to allow these types of companies to infiltrate their cities.

Montgomery and Payday Loans

The southern United States has a long history of dealing with underprivileged and economically depressed regions. In fact, most of the people who are on welfare and get assistance from the government are located in the southern region of the country. The payday loan industry has taken advantage of this fact in order to make a lot of money with these people.

By opening many international, national, and even regional payday lending companies, the owners have been able to profit for the past few years with near immunity. Only recently have people been complaining about the payday loan industry after all of their predatory practices have been found out. Since 2008, the recession has driven millions of people across the globe into the arms of payday lenders who want nothing more than to give a small loan that keeps you hooked for many years of your life.

While they are often vilified, they do provide a service that the public needs. People are in desperate need for money so they take a loan, but what happens when they don’t pay it back? It isn’t such a black and white situation, but it is obvious that more regulation is required.

Stopping More Payday Lending

Because it is so difficult to actually put a stop to the lending, people in the Montgomery, Alabama area have decided they are going to put a stop to it themselves. To do this, they have enlisted the support of the city council to vote whether or not to allow the new payday lender to enter their city and start to work amongst them.

The vast majority of people who are looking for payday loans do not realize that they could find themselves in a serious financial problem within only a few short months. The interest payments are high and most of the time the people who are taking them out do not realize the long term implications.

However, how this moratorium is going to bode for the industry as a whole is unknown. It shows that there are people who are not so happy about their dealings, but it may be temporary and most of the pundits think it will be overturned soon enough. Doing business in the state is a huge freedom that is hard to take away no matter what kind of legal business it might be.

Modesto Legislation Fails Again

Written by David Schmidt. Posted in Payday Loan Debt

Modesto payday loansCalifornia has been one of the states that has suffered the most from the economic downturn in the recent years. Most of the citizens that were living from paycheck to paycheck found themselves in debt with the prospect of no job or opportunities. Many California citizens, and those living in Modesto particularly, decided to use payday loans as a way of tiding themselves over. It has had short term advantages, but things are starting to become problematic for debt holders. In order to protect these people from lenders, Modesto legislation has been put forth in order to prevent predatory lending. The latest news from Modesto indicates that legislation has again failed to take action.

Payday Loans in Modesto California

The payday loan industry has made a pretty penny off of the people in Modesto, California. A new report from the Center for Responsible Lending has showed that California people are accounting for over $570 million for the payday loan industry. That is the second highest in the entire United States and among the unregulated states, these lenders are having a field day.

Many of the people who are paying these millions of dollars are living in the Modesto region. This is why the latest legislation was aimed at stopping predatory lending and implementing some of the laws that assist in reining in these types of loans. There are literally millions of individuals across the country who need protection, but it seems slow to come for those in the Modesto region.

One of the largest problems with the latest legislation failure is the fact that it includes so many bigger lenders. Because it has been very difficult to regulate this high interest rate lending, people are starting to get the same type of loans from businesses like Wells Fargo and other well known banks. These have more clout and can help to protect the industry from legislation at the local and federal level.

What is Next for Modesto?

As the latest legislation fails to pass in Modesto, California, (and the state as a whole), the question of the payday loan industry in the state becomes one of curiosity. What will happen to the industry if they cannot operate unhindered? Will they be forced to change their practices and do things differently?

It is an interesting series of questions, but there is no real solid answer. Most of the people in the Modesto region and California are hoping there will be some protection and relief in the near future. While most do not think that they can get all of their problems solved with regulation, it is a step in the right direction for the public.

Right now, the battle becomes how to actually pass legislation that is fit for everyone. Public opinion is against predatory lending, but legal statutes give these businesses the right to practice whatever they want so long as it is within the bounds of the law. It will be tough to restrict them, but legislation must continue through the country. Also bare in mind that all lenders must be licensed in the State of California which includes internet payday lenders.

The Dangers Of Louisiana Payday Loans

Written by David Schmidt. Posted in Payday Loan Laws

LA payday lendersOut of the 50 states that make up the United States, 23 of them have some sort of regulatory laws regarding payday loans. Unfortunately, the dangers of Louisiana payday loans are due to no regulatory laws at all, and borrowers need to be informed.

Because these companies are allowed to pretty much run the short term loan business any way they wish, the following are the results that borrowers in this state can look forward to:

  • $270.00 in fees for a one-time $100.00 loan. Yes, you read that right.
  • Interest rates in the neighborhood of 780%.  Most credit cards can reach 25%
  • Relentless collection efforts on defaulted loans

They are everywhere

There are currently over 1000 storefronts in Louisiana where a customer can take out a payday loan, and the numbers are increasing. In comparison that would be 4 payday loan stores to 1 McDonald’s restaurant.

Payday loan lenders have collected over 200 million in fees in Louisiana in the last year, and much of those fees end up out of state. These fees are coming from people who are living one pay check away from being broke, and it is a safe bet most of them will need to roll over their loans, thus getting caught in the age old payday loan trap. We just want our readers to be aware of the issues.

Break the cycle

Take care in this state when using these companies. If you must use them make sure you pay the loan back in full on the first due date to avoid any additional fees and payments, and if you are already caught in the payday loan trap break the cycle now!

There are alternatives for paying back payday loan debt without all that interest, and we urge people to explore those alternatives. 
When you’re looking to borrow money, be sure to check out all of your options so you know what your rights and what you’re getting into. Many credit unions are now offering short term loans at around 18%. This is a much better option than 780%

As always we are here to help you in any way we can. Please let us know if we can assist you today.


Manitoba Payday Lenders Required to Repay Fees

Written by David Schmidt. Posted in Payday Loan Laws

Even though the United States is one of the largest markets for payday lending, there are many companies in Canada that operate in a similar manner. The Cash Store is the name of one payday lender that operates out of Manitoba and has been singled out by the government for some redistribution of fees collected on 61 individuals in the region. This incident seems to be a microcosm for what is going on in the country as a whole; lenders are charging more than the states have deemed appropriate.

Manitoba and Fees Returned

Returning the fees to the 61 Manitobans was not easy for the Cash Store, but did not hurt their profits too much. These payday loan companies have a large store of cash and make plenty of profit so it was no problem to refund 61 people. Either way, it is a showing from the state government that they will no longer accept rates of interest that are excessively high. Unlike many states in the US, it seems that the Manitoban government has imposed a limit of $17 per $100 borrowed, which is only a 17% interest rate.

For most banks this is high, but compared to the charges from other payday lenders in the 2-400% range, it is a crippling blow for the industry in the state of Canada. Many people are overjoyed that the government is finally standing up to these large companies, but there are some who need the quick money and will not have access to it anymore.

Was the Manitoban Government Right?

A large question for many advocates of free trade is whether or not the Manitoban government had the right to impose such restrictions. One farmer, named Gordon Repula, noted that he had to pay fees around 33%, which is almost double what is legally allowed in the state. Compared with other states, however, the 33% seems like not much at all. The people who are in need of quick money might not be able to find an adequate lender because they cannot take on as much risk anymore.

This is a huge question that is hotly debated wherever payday loans are allowed. Most people who are working in the industry are fearful of the day when payday loans are outlawed completely and people start to run out of money to even survive.

Whether or not the Manitoban government was right in this instance is irrelevant. It is a clear indicator that the Canadian state governments (and perhaps the federal government as well) is going to restrict the ability for lenders to make exorbitant profits from people who are in need. This might be helpful for some, but it negates the business cycle aspect that will assuredly hurt others. Either way, it is an interesting prospect to watch as the legal rate for payday lending goes all the way down to 17%. There are plenty of states where it might change into something along those lines as well.


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