Lawmakers conflict of interests front and center in South Carolina payday lending debate

Last week, two state legislators in South Carolina decided to recuse themselves from either voting or debating on whether to ban payday lenders in that state.  This is noteworthy because both of these legislators are part of a class action lawsuit against the industry and could possibly makes lots of money depending on how the [...]

Full GAO report on bank fees now available online

GAO: BANK FEES: Federal Banking Regulators Could Better Ensure That Consumers Have Required Disclosure Documents Prior to Opening Checking or Savings Accounts

Center for Responsible Lending hates all credit

This Associated Press story getting huge pickup describes CRL’s new attack on title lenders.   This group simply hates the idea that consumers should have a choice.  
Money quote:  “Once the payday lenders are in check, they vow to go after car title lenders.”  
That sentiment reflects perfectly the nature of these movements.  The movement must always attack, always find new [...]

WSJ: Nobel Prize winner says access to credit is critical, Part Two – Charity

Another interesting comment made by Yunus in the Journal article was his belief that charity is not the best alternative to microloans. Yunus believes that charity cannot ever match a profit making industry for efficiency and service.
Around the country, as lawmakers and payday lending critics call for a ban on payday lending, maybe they should rethink their attitude that charity [...]

WSJ: Nobel Prize winner says access to credit is critical

Saturday’s Wall Street Journal had a very interesting article on Muhammad Yunus, who won the Nobel Peace Prize last year, for his company which offers small loans (known as microcredit) to women in third world countries.  Without Yunus, these women would not have been able to get a loan from the traditional third world lenders who [...]

New Wharton report defines “predatory lending”

David K. Musto, Philip Bond and Bilge Yilmaz, finance professors at Wharton, have authored a new paper, “Predatory Lending in a Rational World,” asking the questions, “What is predatory lending? And what are the conditions that make it flourish?”

They found three market conditions associated with predatory lending:
 
1. There is little competition among lenders
2. Property [...]

What’s a “predatory lender?”

From an article on Delaware online Sunday which quotes David K. Musto, a Finance Professor at the University of Pennsylvania’s Wharton school: 
 ”Three market conditions are associated with predatory lending, Musto and his colleagues found: There is little competition among lenders, property owners are sitting on lots of equity and borrowers are poorly informed about risks.”
The payday lending [...]