Payday Pundit has moved!!

As of April 19th, the Payday Pundit has a new host and has moved to www.paydaypundit.org.

Please be sure to update your favorites, bookmarks, links, etc. so you can continue to read the most up-to-date information on the payday lending industry.

Payday Lending Up North

It looks like the Canadian Payday Loan industry has started a blog of their own, Advance View.  According to Advance View, “If you follow the industry closely then you are aware of a number of developments in the regulatory field that have been unfolding recently and that will continue to unfold in the months ahead. We will cover these developments and others that will be important to consumers and industry watchers alike. Over our first few posts, we will provide some useful background information about what is at stake as governments in Canada try to figure out the best way to regulate this relatively new industry.”

Buckeye Surgeon: Welcome to the Real World

Just came across a blog by a surgeon in Ohio discussing the high taxes he paid in the Buckeye State.  In case Mr. Buckeye Surgeon is not paying attention to the debate over payday lending in Ohio…he may want to read what the National Taxpayers Union had to say about the impact a ban on payday lending would have on taxpayers.  The excerpts below discuss a proposed ban in Virginia. In Ohio, the numbers are even greater, with millions more customers, nearly 1,600 storefront locations and 7,500 Ohioans employed by the industry.

…Close to half a million people would still need to get emergency funds from some other source besides payday loans. That source could be taxpayers.

…Banning payday loans runs counter to all the political lip service that is paid to personal responsibility and self-reliance.

…In addition, many citizens would be forced into unemployment if the industry were to be eliminated - again, squeezing taxpayers as well as the commonwealth’s budget. Across the state, about 2,400 Virginians employed by the payday-lending industry would lose their jobs, their health insurance, and other benefits. State legislators must ask themselves whether the Virginia economy - despite an overall downturn in the U.S. - is really so robust that they can afford to vote 2,400 jobs out of existence.

“Responsible payday lenders have helped millions of Kansan familes”

Tom Linafelt of QC Holdings was obviously annoyed with an uninformed editorial in the Kansan newspaper.   Here’s his letter to the editor, which goes on to make the key points that:

• The vast majority of Kansan use payday loans responsibly, and;
• Banning payday loans will force customers into more costly options. 

Protecting Access to Credit in California

Legislators in California have debated the issue of payday lending and are in agreement that consumers need reasonable protections, but to prohibit payday lending wouldn’t help anyone.

I think that there is need for increased consumer protection. And I’d like to see, but I’m not interested in seeing a prohibition,” said Assemblywoman Liz Wolfe.

To see poor journalism at its finest, watch Michael Finney, from Sacramento’s KGO ABC 7,  and the anchors chit-chat before and after the story.  Their comments demonstrate they have not only never used a payday loan, but did not take the time to speak to any customer who had.

CFSA Statement on Virginia Payday Lending Legislation

“We appreciate the effort of the General Assembly and Governor to forge a compromise on a complex issue; the result is one of the most restrictive payday-lending laws in the country. In addition, Governor Kaine deserves  credit for acknowledging that the work of the General Assembly was difficult and that the compromise developed during the legislative process represented a careful balance, which should now be given the chance to work.

“Still, we continue to have concerns about how lenders will be able to operate under this regulatory framework and how consumers will adjust to what is essentially a new credit product. The additional regulations included in this legislation change what consumers tell us they like about payday loans – that they offer a simple, transparent and straight-forward avenue for managing unexpected expenses. Some lenders will no doubt be forced to close as a result of this new law, and others will be significantly impacted.

“We have always maintained that the best consumer safeguards ensure continued availability of payday loans while protecting those who misuse them and other financial products. But we have difficulty with painting all borrowers with the same broad brush; this legislation does that, and unfortunately penalizes responsible borrowers. It does not effectively balance protections from excessive debt and preserving access to credit.

“Our customers recognize that payday loans are often their least-costly option, helping them to avoid unregulated alternatives like off-shore Internet lending operations as well as recurring debt or stiff fees associated with credit cards, bouncing a check or neglecting a bill.

“Opponents of our industry have always been singularly focused on the elimination of this industry through outright repeal or by placing prohibitive restrictions on the product we offer to consumers. Virginians deserve the freedom to make their own financial decisions, choosing credit products that best suit their needs and their families.

– Tommy Moore, Executive Vice President, Community Financial Services Association

The Elite and Payday Lending

From Daily Kos, “Hillary doesn’t think Obama is elitist, neither does she think he is out of touch with working class Americans. At least no more so than she is herself, or McCain is, or any politician that isn’t living paycheck to paycheck is.”

According to Wikipedia, “Elitism is the belief or attitude that those individuals who are considered members of the elite — a select group of people with outstanding personal abilities, intellect, specialized training or experience, or other distinctive attributes — are those whose views on a matter are to be taken the most seriously or carry the most weight; whose views and/or actions are most likely to be constructive to society as a whole; or whose extraordinary skills, abilities or wisdom render them especially fit to govern.”

When it comes to payday lending, the question, put simply, this: do you believe that adult Americans are capable of making a reasonable decision about financial services products when they are presented with clear, understandable and truthful information about the costs of those products?  And are they better off for having these choices?

For the elitists who are calling for a ban, the answer is clearly no. They side believe that average Americans may not be smart enough or sophisticated enough to make their own choices, and therefore it’s up to government to deny them those choices for their own good.

Payday Pundit thinks that is un-American.

Ohio update: 14 Senators sign 36% rate cap bill

From today’s Columbus Dispatch:

“If Grendell’s bill or House Bill 333 were to pass, the payday-lending industry says its more than 1,600 stores would be put out of business quickly. Under a 36-percent rate, they would be allowed to charge less than $1.50 per $100 borrowed on a two-week loan. The current rate is about $15.”

 

California committee action on payday lending bill

This Sacramento Bee story details Monday’s action in the California Assembly’s Banking and Finance Committee.    

Center for Consumer Freedom Weighs in on Arkansas Attorney General

A consumer group has weighed in on the Arkansas payday loan debate saying this:

With the apparent success of his intimidation tactics, McDaniel joins the list of meddling elitists who couldn’t care less about soaring food prices. And the 500-plus employees of payday loan companies in Arkansas will join 80,000 other Americans at the back of the unemployment line.