More than two thousand payday loan customers and lenders rallied in Ohio to protest severe restrictions proposed by that state's Senate on cash advances.
Holding signs such as "My life. My credit. My choice!" the payday loan supporters voiced their concern over a bill that would severely limit the credit options of working people -- not to mention cut some six thousand jobs.
"No business, not a credit union, not a bank, not even a non-profit can lend money for less than 10 cents a day," said Jamie Frauenberg, President of the Ohio Association Financial Service Centers.
Commenting on proposed limits on fees and interest charged by payday lenders, Frauenberg added: "Even Goodwill could not offer payday loans in Ohio under a 28% APR cap."
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Wednesday, May 28, 2008
Friday, May 16, 2008
ATTORNEY CALL-OUT HIGHLIGHTS PAYDAY LOAN MYTHS
The Community Financial Services Association of America's recent selection of an Ohio attorney as “winner for most untruths” highlighted some popular misconceptions about cash advance lending.
Besides alleging that payday loans go to those in "extremely bad financial shape" the attorney claimed that "responsible" lenders would steer clear of such customers -- despite the fact that cash-loan applicants must by rule maintain bank accounts to begin with. (This is particularly relevant as Ohio is considering legislation that would severely restrict the rates that payday lenders could charge customers.)
It is not known whether the attorney in question responded to receiving such an honor.
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Besides alleging that payday loans go to those in "extremely bad financial shape" the attorney claimed that "responsible" lenders would steer clear of such customers -- despite the fact that cash-loan applicants must by rule maintain bank accounts to begin with. (This is particularly relevant as Ohio is considering legislation that would severely restrict the rates that payday lenders could charge customers.)
It is not known whether the attorney in question responded to receiving such an honor.
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Tuesday, May 13, 2008
CONSUMER ADVOCATE: RESTRICTING PAYDAY LOANS A "BIG MISTAKE"
CONSUMER ADVOCATE: RESTRICTING PAYDAY LOANS A "BIG MISTAKE"
Recent attempts by politicians to limit payday lending are misguided, according to an official of a leading consumer advocacy group.
Tim Miller, communications director at the Center for Consumer Freedom, cited as proof a Federal Reserve study that found both bounced-check fees and bankruptcy filings rose dramatically in Georgia after payday lending was banned.
Critics of payday lending frequently point to interest rates, which, when annualized, can appear to be high. In response Miller asks: "what's worse, bouncing checks and wrecking your credit rating, or paying a lender $15 for a $100 advance on your paycheck?"
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Recent attempts by politicians to limit payday lending are misguided, according to an official of a leading consumer advocacy group.
Tim Miller, communications director at the Center for Consumer Freedom, cited as proof a Federal Reserve study that found both bounced-check fees and bankruptcy filings rose dramatically in Georgia after payday lending was banned.
Critics of payday lending frequently point to interest rates, which, when annualized, can appear to be high. In response Miller asks: "what's worse, bouncing checks and wrecking your credit rating, or paying a lender $15 for a $100 advance on your paycheck?"
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The upcoming Cinco de Mayo holiday is a good time to think about cash advances -- and not for financing your bar tab, either. Rather, it's time to ref
The upcoming Cinco de Mayo holiday is a good time to think about cash advances -- and not for financing your bar tab, either. Rather, it's time to reflect on what payday loans should be used for, and when they should be taken out.
For example, the Community Financial Services Association of America (CFSA) has mandated that its member associations not encourage payday lending for any kind of leisure activities, including drinking or gambling. Rather, your payday loan should be applied to medical bills, car repairs or other sudden short-term expenses.
Use your cash advance for what it was intended for, pay it back in full and on time, and you'll find payday loans can be one of your best financial allies. Save your spare change for the margaritas -- we bet even the CFSA would drink to that!
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For example, the Community Financial Services Association of America (CFSA) has mandated that its member associations not encourage payday lending for any kind of leisure activities, including drinking or gambling. Rather, your payday loan should be applied to medical bills, car repairs or other sudden short-term expenses.
Use your cash advance for what it was intended for, pay it back in full and on time, and you'll find payday loans can be one of your best financial allies. Save your spare change for the margaritas -- we bet even the CFSA would drink to that!
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Thursday, May 1, 2008
PAYDAY LOANS GET FEDERAL RESERVE APPROVAL
Wednesday/April 23/2008
A study by the Federal Reserve Bank of New York concluded that payday loans are "not predatory" and may actually improve the lives of the people who use them.
“To the contrary, the report concludes that payday lenders may actually enhance the welfare of households by increasing the supply of credit,” said Darrin Andersen, president of the Community Financial Services Association of America.
Some key conclusions of the study:
“[Credit]...delinquency rates were marginally lower for risky households in states with unlimited payday loans.”
“Households with uncertain income who live in states with unlimited payday loans are less likely to have missed a debt payment over the previous year.”
“In the end, the simple fact that payday lenders have triumphed over pawnshops suggests that payday lending raises household welfare by providing a preferable alternative.”
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A study by the Federal Reserve Bank of New York concluded that payday loans are "not predatory" and may actually improve the lives of the people who use them.
“To the contrary, the report concludes that payday lenders may actually enhance the welfare of households by increasing the supply of credit,” said Darrin Andersen, president of the Community Financial Services Association of America.
Some key conclusions of the study:
“[Credit]...delinquency rates were marginally lower for risky households in states with unlimited payday loans.”
“Households with uncertain income who live in states with unlimited payday loans are less likely to have missed a debt payment over the previous year.”
“In the end, the simple fact that payday lenders have triumphed over pawnshops suggests that payday lending raises household welfare by providing a preferable alternative.”
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