In NY there seems to be some interest with potentially passing a law that would allow check cashing stores to lend money. The bill, they would call the “Short-Term Financial Services Loan Act”, would potentially allow registered check-cashing stores to make loans between $300 and $2,000 for 90 to 180 days. The loans could not be more than 25 percent of a borrower’s gross monthly income; installment repayments must be 10 percent or less. This could certainly benefit those frequenting the check-cashing stores that are paycheck to paycheck. New Yorkers are in need of this sort of short term loan because there are about 825,000 un-banked adults in New York City, according to the Department of Consumer Affairs, and this is something I am sure is similar in some of our nation’s largest cities. Advocates of this new pending law are wanting it to be known that this is NOT a payday loan, but it is in fact a loan with a repayment schedule that has installment payments within two days of a borrower’s payday.
No matter what it would be “called” it seems that there could be some additional resources for New Yorkers that are paycheck to paycheck. If a law like this is passed in NY, then will other states follow? We shall see… Stay tuned!