Category: payday loans

  • Quiet in Illinois

    HB 537 has until tomorrow to pass.  This bill will cap rates on installment loans to 99% among other things.

    This bill is not supported by the CFSA or ISLA in Illinois.

    If the bill passes, all cash advance lenders will have to start offering payday loans, which are regulated to allow.

    Loan Terms:
    Maximum Loan Amount: lesser of $1000 or 25% gross monthly income
    Loan Term: 13-45 days
    Maximum Finance Rate and Fees: $15.50 per $100
    Finance Charge for 14-day $100 loan: $15.50
    APR for 14-day $100 loan: 403%

    Debt Limits:
    Maximum Number of Outstanding Loans at One Time: Two
    Rollovers Permitted: None (cannot rollover)
    Cooling-off Period: 7 days after 45 consecutive loan days
    Repayment Plan: Yes

    Collection Limits:
    Collection Fees: One $25 NSF fee (Presentment limit = 2)
    Criminal Action: Prohibited

  • Contact your state Senators through the Internet

    http://tinyurl.com/votersvoice

    Started by Patricia Dauterman

    On April 26th the Senate will vote to begin debate on the Consumer Financial Protection Agency bill. While well-meaning there are unintended consequences that will negatively impact consumer choice in the local financial market. After reading this note we ask you to do the following:
    1. Follow the link at the bottom of the note and write your Senator.

    2. Repost this onto your social media sites so more voices may be heard.

    The Consumer Financial Protection Agency will deny millions of United States citizens access to credit.

    It will have the power to regulate and restrict personal credit options including loans from community banks, credit unions, local automobile dealerships, retail layaway plans like Wal-Mart, even from doctors and dentists who have a payment plan for medical or dental work.

    There is no reason to create the CFPA, which will be a gigantic federal bureaucracy that will regulate local businesses that are already well regulated by the states or current laws.

    The CFPA will wipe out thousands of jobs while doing little to reign-in the abuses of Wall Street.

    With credit constricted, thousands of jobs on Main Street will be lost as local companies who offer credit services or depend on credit for business costs have to either close or lay-off employees.

    The community bankers, small lenders, local businesses that issue credit had nothing to do with the financial meltdown. They provide small amounts of credit to America’s middle class. Theirs is no reason to put a federal agency between these businesses and their customers.

    Unbelievably, this legislation would cripple financial choices on Main Street while providing Wall Street another bail out and costing taxpayers another $400 billion in taxes.

    Customers deserve to make their own financial choices and don’t need the government making decisions for them.

    Small local lenders didn’t take a dime of federal bailout money and were not responsible for the financial meltdown.

    Write your Senator today!

    http://tinyurl.com/votersvoice

  • Illinois bill has until May 7th to pass

    Senate bill 655 has until May 7th to pass.  Illinois currently has two models for the cash advance industry.  The first model is offering payday loans and has a state database.  The other model is offering installment loans.

    This bill will cap rates on loans greater than 121 days to 99%.  Practically everyone, including the CFSA, are backing the new bill.  Small and medium size cash lenders, specifically ISLA (Illinois Small Loan Association) are against it.

    I’d love to hear both sides of the argument, CFSA and ISLA.

  • Wisconsin has a new payday law

    The Wisconsin Senate passed a new bill in the 11th hour.  Here are the details.

    The new law would restrict where payday loan stores could locate and limit their loans to $1,500 or 35% of monthly income, whichever is less. Borrowers would be able to renew those loans just once. Auto title loans would be limited to half the value of a vehicle.

    Title lenders would be required to notify borrowers before seizing their vehicles; could charge borrowers only “reasonable” storage fees if they repossessed their vehicles; and give borrowers cash back if they sold their vehicles for more than the amount of the loan.

    The bill does not include a state database, like Veritec.  This is a good thing.

    Two things I’m curious about:

    1. Only one rollover is permitted, but can the borrower pay off in full and reborrow?  I did not see a cool off period.
    2. Regarding title loans, how is the value of the car determined?


  • Wisconsin has until Thursday to pass a bill

    The Senate bill is a much better bill.  The general assembly bill would ban title loans, limit lenders to $600 and ban rollovers.

    If a bill does not pass by this Thursday, it can not become law this year.  Read more in the Wisconsin AP News.

  • Online payday lender chased out of Massachusetts

    Attorney General, Martha Coakley, settled w/ New Mexico based Fast Bucks.

    “The settlement prevents payday lender FastBucks from offering its high interest “payday” loans to Massachusetts consumers, and requires FastBucks to return all interest charges and fees that it assessed against Massachusetts consumers. The Attorney General’s Office has already identified $35,000 in fees and interest owed to consumers, and is continuing to work to identify borrowers entitled to restitution. FastBucks will also pay $10,000 to the Commonwealth.”

    Massachusetts allows 23% plus $20 administrative fee upon the granting of a loan.  This makes it tough to make money there.

  • Wisconsin bill inches forward

    Wisconsin has payday loan reform on it’s agenda.  The Senate has two bills floating around.

    “One bill, written by Sen. Jim Sullivan, D-Wauwatosa, would limit loans to $1,500 and restrict payday lenders from establishing themselves within 1,500 feet of another lender or within 150 feet of a residential area. The bill would also restrict borrowers from rolling over loans to a later pay period more than once.”

    “Bill number two limits loans to $600, prohibits any rollover of loans and bans auto title loans.”

    One of these bills has until April 22nd to get out of the house.  I like our chances.  Wisconsin currently has 548 payday loan licenses.

  • Cash Store buying Sask. regional payday loan provider for $4.4 million

    Cash Store Financial (TSX:CSF) announced Tuesday it plans to acquire EZ Cash, a regional payday loan provider with 14 locations throughout Saskatchewan.
    I pulled out the old calculator, and that’s about $315k/store.  Not bad.

  • Amusing in Arizona

    In a blog on AZ Central, Laurie Roberts writes about the possible resurrection of payday loans.  It’s a conscending article, but it did not stop the newspaper from advertising payday loan keywords in the text of the article.

    “…payday loans and their 400% interest rate…”

    This comes down to the perception.  The newspaper will advertise payday loans b/c it means revenue, but they love to bash payday loans b/c that’s what people want to hear.  The general public does not want to stick up for an industry that’s making money.  Even Google gets harassed by consumer groups and they give everything away for free.

  • Krugman, Payday Pundit and my opinion

    Payday Pundit published a post titled “Do I agree with Paul Krugman?” It has to do w/ the new finacial reform bill that’s backed by the White House.

    I agree w/ Payday Pundit b/c non-financial institutions, like payday lenders, did not create this mess.   Why are we getting pulled into it?

    I also agree w/ Krugman that we can NOT rely on public officials to show wisdom and do the right thing.  The problem w/ Wall Street is the people that tanked the economy are making the rules.  Moody’s should be out of business.  AAA rated bonds should never, ever default.  They did.