Michigan Debt Collection Laws

Nitzkin & Associates’ debt collection blawg often contains interesting pieces regarding debt collection regulations and the lending industry in general. Today’s post is no exception and contains some food for thought comparing the difference in Michigan debt collection laws regarding bad checks written to most businesses versus bad checks to payday loan companies.

Essentially, the blog notes that while most companies that receive a bad check can take the writer to court, payday loan companies face a number of restrictions in recovering the debt.

Read the whole post here.

George Will on “Predatory Lenders” and the liberal narrative

In his most recent column, George Will looks critically at all the hyperventilating about our nation’s economy in “crisis.”  When compared historically, Will demonstrates that our economic situation today is not really so bad. His insights into the subprime mortgage “crisis” is particularly noteworthy. He says about the small percentage of Americans who have taken subprime mortgages and cannot afford to pay them:

“Casting this minority of a minority as victims of ‘predatory’ lending fits the liberal narrative that most Americans are victims of this or that sinister elite or impersonal force and are not competent to cope with life’s complexities without government supervision.”

Payday lenders have always believed our customers are smart and savvy consumers who understand that a payday loan is often their most financially sound option.  Regrettably, this doesn’t jive with the liberal narrative.  

Who’s watching your bounced checks?

According to Bankrate.com, the answer is ChexSystems, a company which holds your bounced check information for five years, providing data to other banks and lenders who asses whether you’re potentially a ”valued customer or a liability.”  Eighty percent of financial instituations use this service.

Of course, avoiding bounced checks is the number one reason consumers take out payday loans.

 

 

Analysis of Ark. payday lending situation

The Arkansas Business Journal picks up on an Associated Press story that analyzes how we got to this point in Arkansas.  This paragraph gets to the heart of the matter:

“The 1999 law {the Check Cashers Act} declared that income earned by payday lenders was a fee and not interest, avoiding the 17 percent limit on interest set out in the Arkansas Constitution. The Supreme Court in 2001 ruled that the Legislature had no power to determine what is or isn’t interest, but the court didn’t rule on the constitutionality of the act.”   

The article goes on to say that the Arkansas State Board of Collection Agencies will continue to issue licenses to payday lenders. 

“Public need more, not less options”

So says Tim Miller of Center for Consumer Freedom in today’s Baxter Bulletin out of Arkansas.  Money quote:

“Borrowers are best served when they have more choices to pick from, not when politicians eliminate what is for many their only option.”   

The Payday Pundit has been making this point over and over.  Payday loans are an option for consumers facing unexpected expenses.   The payday lending industry has always said that  competition is the best way to keep costs down.  

 

Increased Costs for Consumers in Kansas City

Show-Me Daily offers their take on Tuesday’s disappointing vote in Kansas City.  Unfortunately, when legislation like this is passed, it’s not just businesses that suffer.  Consumers end up feeling the squeeze. 

26,000 constituent letters delivered to OH legislators

More than 26,000 letters from payday lending customers and employees have been delivered to state legislators in Ohio.  The customers who’ve actually used the service should be a vital part of the payday lending debate.

From a resident of Columbus, OH:

Asthtabula County doesn’t have a lot of good jobs for people. You do run short paycheck to paycheck!  That’s just a fact of life.  The economy is terrible. Everything goes up–utilities, gas, food, etc.–but your paycheck!  Banks don’t give out loans like they used to (signature loans) or any other small amounts for that fact…I make my own financial decisions and tehse establishments are at least there for us to choose from. Taking these places away would really make things bad for myself and so many others in Ohio.

From a woman in Knox County, OH:

I have used a payday advance and am glad it was there to help me…It is quick, and I don’t have to use any co-signers, collateral, etc. In many cases, these advances help pay for my family’s medical needs….I would like to have the freedom to manage my own finances (including non-intrusive loans) that we, as Americans deserve.

Let’s hope legislators take to heart the opinions of their constituents.

Consumer Freedom discusses Ark. situation

The free market  consumer group–Consumer Freedom–has this to say about the situation in Arkansas:

{The} announcement on Tuesday that most payday lending companies have caved is bad news for consumers who can’t get a loan but would prefer not to pawn their television or bounce a check.

You can read the rest here.

Left Leaning Blog Presents the Other Side of the Story in Ohio

Democrat Jeff Coryell provides some truly substantive discussion on a side of the payday loan issue which isn’t being covered by Ohio media.  

Joyce Beatty represents a district with severely underserved neighborhoods where both banking services and employment opportunities are scarce. (My own state representative, Barbara Boyd (D-Cleveland Heights), represents such areas in East Cleveland, and she has spoken to this issue as well.) The fact is that payday lending outfits, despite their potential for abuse and their unpalatable business model, do provide some form of banking services that are accessible to people living in neighborhoods without commercial bank branches. Sometimes people do need small, temporary loans, and as a practical matter they currently have nowhere else to turn. Payday lenders also provide some jobs, and they pay rent and buy office supplies. In struggling urban areas where local commercial establishments like bars and restaurants have been dealt a double blow by the smoking ban and the elimination of the popular video games, the threat of potentially crippling another form of commercial activity is to be taken very seriously.

South Carolina Legislative Update

The State covers the latest developments of the payday lending debate in South Carolina. Coverage includes common-sense commentary from  S.C. Rep. Phillip Owens on payday lending businesses and their lending practices. 

The business man is not going to be irresponsible in his business practices — in this case, the lending business. He would like to get repaid.

An allegation oft repeated by industry critics is that payday lenders lend money to people who can’t pay them back.  In case critics need reminding: Payday lenders are not operating as charities or non-profits. They are a business, run by business people.  If you lend money to people who can’t pay you back…you business model would prove faulty and you wouldn’t be in business very long.  Don’t they teach that the first day of business school?