Category: Missouri

State Rep. Mary Still, a Democratic, is trying to get payday loan legislation going again. She’s calling for 36%.

Is there anything more annoying than the comparison between payday loan stores and McDonalds fast food restaurants. Who cares if there are more loan stores, anyway. So if McDonald’s opened 1,000 new locations, it’s all of a sudden ok to have 1300 payday loan stores in the state? It’s just annoying.

Rep. Brian Yates of Missouri is stepping down from office to take a position w/ payday lender QC Financial.

This, in of itself, is not big news; but I think it’s showing that a cash advance is beginning to become mainstream.

You can read the full article in St. Louis Today.

I hope some payday lenders show up to this to voice their concerns about the legislation. They’re having a district legislative hearing to discuss payday loan reform at 6:30 p.m. Monday at the Columbia Public Library, 100 W. Broadway.

In Missouri, Deputy General Counsel Mike Dandino said:

“customers who most often used payday loan services were poor, elderly or living paycheck to paycheck. Many of the same customers either face threats of disconnection or have fallen behind on bills, making them easy targets for high-interest loans.”

I find it hard to believe that a highly educated person would stereotype these people. New flash: people that use payday loans, use them b/c they can’t pay their bills on time.

In an article titled, “Public Counsel targets utility billing, payment practices“, some Missouri legislators want locations that offer payday loans to stop offering payment services for utilities.

Richard J. Mark, senior vice president of energy delivery at AmerenUE, said,

“the utility tried to provide customers as many options as possible, including payment centers spread across its 25,000-square-mile service area.”

Dandino also says:

“It is not in the interest of consumers to have utility companies steer customers to these predatory lenders,”.

Great! We have another Elliot Spitzer on our hands. Hey Dandino, just do you’re job and leave saving the world to to someone else. Ask the people who use payday loans properly, if they’re bad.

Missouri made the news in an article titled, “Nursing home payday lenders scrutinized.”

The article is about a two companies that own 62 nursing homes and offer their employees payday loans. The payday loans are then deducted from their paycheck.

Personally, I don’t see what the big deal is, if they’re licensed.

The big news is that a lender can make good money in Missouri. Missouri lenders charge about $317M in fees. This is second, only, to California in payday lending. Missouri is also very favorable when it comes to car title loans and signature, installment loans. It’s also home to 34 online payday loan companies.

Credit unions are seeing oppourtunies to offer payday loans. I think this is great for the industry. Competition drives prices down and gets more people using the product and keeps legislators from blacking out a state.

The reality is that payday lenders have a much different cost structure than credit unions and banks. Tom Linafelt, spokesman for QC Holdings, owner of the biggest chain of payday loan shops operating in Missouri says “One of the great myths of our industry is that we are making huge profits,” Costs consume $10 to $12 of each $18 loan fee on a $100 loan, he says. His company, based in the Kansas City suburbs, earned a $13.6 million profit last year.

Payday lenders are at a huge disadvantage b/c they do not control the checking account, like credit unions and banks. The charge offs are much higher.

One thing for certain is that payday loans are big business in Missouri. Almost $870M in loans accruing yields an estimated $157M in fees annually.

Read the full article at the St. Louis Post Dispatch.

Fired Up Missouri is a popular political blog. They obviously don’t mind throwing darts at the GOP regarding the PDL industry. I guess they’re fans of free markets.

Missouri have some of the best pro-lender laws in the nation.