Payday Loan Company Earns Prestigious Award

If you are looking for work in Washington State, you might want to consider sending a resume to Moneytree Inc. The Tukwila, WA based payday loan and cheque cashing company has been recognized as the best large company to work for by Washington CEO Magazine. Thanks to PaydayPundit for the find and congrats to Moneytree Inc.

PaydayPolitics.org launched South of the Border

Online payday loan content is relatively hard to find, compared to some of the other topics that populate the web, so I am always pleased to share new sites that focus on this topic. This morning, the people behind PaydayFacts.org launched PaydayPolitics.org. This is a type of site that is more common in the United States, where the political climate is more adversarial and members of the federal and state legislatures receive far more attention to their personal track record, both politically and otherwise.

The idea of the site is to track political candidates and provide voters with information on their payday loan related track record. This will be very helpful for voters who have a strong opinion about payday loans and would like to support those politicians who support the effective use of the product.

Here is a bit of information about how the site is structured:

"Under each candidate profile, you'll find a picture, political stats, contact information, etc. in addition to quotes/voting history regarding the Payday Loan industry. Below each profile, you can post any additional facts/editorial content you would like. We'll give each candidate a 'PaydayPolitics.org Rating' and you can post your agreement or displeasure with that, as well, if you like."

PaydayFacts.org joins the payday loan blog community

For those of you who are looking for additional sources of information and commentary on the payday loan industry, PaydayFacts.org is the latest payday loan related blog to hit the web. Here is what they have to say on their "About" page:

"Our mission is to empower consumers by giving them the facts about the Payday Loan industry, an industry which has come under attack in many states across the nation by legislators and lobbyists who want to limit consumer choice by effectively outlawing Payday Loan practices."

I have added this site to my daily reading list and will be sure to pass on any posts that are relevant to the payday loan industry in Canada.

Worth re-posting: Payday Pundit wants to shout from the rooftops…

Further to my previous post, here is a Payday Pundit post that illustrates how even award winning payday loan alternatives offered by not-for-profit agencies in the United States still amount to 252% APR:

"Even credit unions and charities could not offer payday loans under annual percentage rate caps of 24%, 28% or 36%"

Thoughtful insight from the blogosphere

As someone who is relatively new to the world of blogging (this blog hit the 'sphere in April), I have been surprised to see the level of commitment that some bloggers and blog readers put into their posts and their comments on other people's posts. A great example is the comments that followed a high octane blog entry from Matthew Mayer titled You Can Still Save Payday Loans in Ohio. The article itself is interesting, if a bit aggressive, but the comments that follow about the ins and outs of the cash advance business make for an even more informative read. Yours truly even took the opportunity to throw in a cent or two.

While it is well worth the time to read through the full list of comments, here are some highlights:

• Payday loan borrowers sent 30,000 letters to Ohio law makers (I doubt there were 30,000 Canadians who even knew about either the Manitoba or Nova Scotia public utility board hearings regarding payday loans).
• Over 5,000 people participated in rallies relating to the pending Ohio payday loan legislation.
• The "faith based community" in Ohio is unified against payday lenders (not sure of the importance of this point, but it was interesting news nonetheless).
• An interesting link to an article about "The Self-Interested Self-Help of the Center for Responsible Lending" (I hadn't seen this article before and I will certainly give it a read and pass on the Coles notes in a future post).
• Reference to a North Carolina study of payday advance users where “87% said that payday advance companies provide a useful service.”
• Some interesting comments from former payday loan employees, one talking about how they work with borrowers to try to help them manage their payday loan debt and also describing how hard they work to ensure that they do not lend to overextended borrowers.
  
• And finally, an interesting YouTube video of a payday loan company talking about the approach they take to the cash advance business (two posts in a row with video!):

The Problem with APR

This cartoon comes from Check Into Cash via Payday Pundit and it is a fun look at the trouble with using APR (a measure of annual interest) to describe the cost of a payday loan (click the image for a larger view):

From MotherJones Blog: Banks make payday lenders look like a bargain

As if to complement 310-LOAN's comments yesterday to the Nova Scotia Utility and Review Board, MotherJones is citing a study today about the high cost of overdraft fees from banks (thanks go to Payday Pundit for this find):

MotherJones Blog: Banks Give New Meaning to Protection Racket:
Payday loans have gotten a lot of bad press lately as state governments attempt to crack down on the 'legal loansharking' outfits that make very short term loans with interest rates going as high as 500 percent. But a new study by Marc Anthony Fusaro, a professor of economics at East Carolina University, found that the overdraft loans given by banks these days make payday lenders look like a bargain.

Hidden Consumer Loans: An Analysis of Implicit Interest Rates on Bounced Checks:
Payday lending attracts attention for its high interest rates, but bounce protection loans are much more expensive. Bounce protection is a program where consumers overdraft – write checks in excess of the checking account balance – and the bank pays the check allowing the account balance to be negative. For this service/loan, banks charge the standard non-sufficient funds (NSF) fee. When the amount borrowed is low and the time outstanding is short, the effective interest rate paid on this loan can be quite high. Using a unique data set we are able to quantify how high the interest rate is. We find that the median implicit interest paid by consumers is over 4,000%.

Payday Pundit is MIA

I am not sure what the folks over at Payday Pundit did to offend WordPress, but apparently the CFSA blog has been "archived or suspended" for violating the WordPress terms of service. I know some people find payday loans offensive, but come on!

(Update: As of April 21st, Payday Pundit is back online - WordPress must like payday loans afterall!)

From Payday Pundit: “Public need more, not less options”

Payday Pundit dug-up a commentary from Tim Miller at the Center for Consumer Freedom today arguing that the "Public need more, not less options"

Given the Manitoba decision to cap payday loan rates in a way that drives at least some (at worst most) cash advance companies out of business begs the question: what do consumers think? While some bigger American firms may step in to fill the gap left by the small to medium-sized lenders who cannot compete at 17% of the loan amount, there will certainly be a smaller number of companies offering this quick cash service. What concerns me about this decision is that nobody has asked consumers what they think. Do consumers want choice taken away from them? And at what cost? There are plenty of "experts" who are happy to speak for consumers (myself included), but it would be refreshing if someone would let consumers speak for themselves.