NEXT: Wisconsin please step to the plate. It appears WI is the next state to have lawmakers trying to pass a bill that would cap the interest rate on payday loans. Todaystmj news is reporting that Wisconsin’s new proposal would cap interest rates at 36 percent annually. Similar to other states and potential laws being passed, there is opposition to this potential law and it will all have to pan out in court. Leadpile will keep an eye on this.
Due to ongoing payday lending regulations, many states are closing up their store front properties. Ohio has implemented recent payday lending regulations and more than a third of the stores have closed up. Cincinnati.com points out, “Payday lenders operated roughly 1,600 retail locations across Ohio before voters approved new restrictions. Now, payday lenders run just 960 storefronts.” Unfortunately, this sort of scenario is happening with a lot of the other states across the country. Will these companies with a brick and mortar presence simply resort to just the online lending route? For some, the convenience of walking in a cash advance store is easier because maybe the inability to get access to a computer.
This also opens up even more questions about what will payday lenders look to do in the future with continuous payday regulations coming up in the various states? “Installment loans” seems to be what payday lenders are going to be able to provide to consumers to help them with their need for additional money. These short term, non securitized loans will allow consumers with the much needed cash, but with a slightly longer period of time to pay back the loan. Hopefully this new venture will then allow our payday lenders to keep some of their brick and mortar stores open, to still be able to provide the much needed loans, even in payday “excluded” states? We hope so!
This leads to potentially some great opportunity with the online lead generators such as Leadpile Lead Exchange. The bottom line is people need quick fast cash, and sometimes it is more convenient to go in a payday loan store, but then for some it is easier to apply online for a loan. Payday loan lead generation is a very popular vertical for affiliate marketers and other online marketing individuals to get into. However, following the proper procedure and making sure the user experience is truly safe and positive is the key.
We all know payday loans don’t exactly have the best image, however there are a need for them in certain situations. I came across this article on personalmoneystore.com, discussing a very interesting type of loan. This “automobile down payment loan” is said to be a loan that no credit check is performed, and there is no collateral securing this loan. However, after reading more about this, I thought this reminded me of a payday loan, but with a different name.
We all know lending requirements have gotten a lot more strict, however consumers still need to pay close attention to the specifics of any money they are getting. Don’t get me wrong, this is not necessarily a bad thing that consumers should not look at. However, maybe the key to getting a more positive image on the payday loan industry is to put different “names” on the loans. Leadpile will keep an eye out for any other names we identify as a payday loan.
With so many consumers being really strapped for cash, and banks trying to find additional revenue, some banks are offering an alternative type of loan which appears to be like a payday loan. As we all know, payday loans are issued by payday lenders, not necessarily our local banks. However, Tennessee’s Fifth Third and U.S. Bank are offering 35 day payday advance loans. According to Nashville Business Journal, “The loans come with an annual percentage rate of 120 percent, or a 10 percent fee on money borrowed. That’s a rate much higher than almost any other form of credit, other than businesses that offer pawn, title or unsecured payday loans, which often charge fees as high as 400 percent APR.” So my question is, is this the beginning of banks now offering payday loans? Will they have to go through the same regulations as the payday lenders are having to go through?
Brick and mortar payday stores, online payday lenders and others that deal with payday loans are facing more and more regulations these days. Will our nation’s top 10 banks now be on that list of those being faced with the payday loan regulations?
Washington D.C. lobbyist have some new priorities to take care of. Payday lenders are working on a lobbying campaign to fight back on legislation that would put federal restrictions on the industry for the first time.
The Hill.com states there are new limits that will be presented for the first time at a House Financial Services subcommittee hearing today. These lobbyists are getting ready to put their gloves on to prevent stringent federal regulations. The article goes on to say, “The Community Financial Services Association of America, the industry’s main trade association in Washington, is planning to raise more than $1 million from its 14,000 store members for a lobbying campaign this year. The industry expects to have 11 lobbyists working the issue in the Capitol, and is coordinating with online lenders and with some of the larger individual payday firms with their own Washington lobbyists.” Leadpile will be keeping an eye on the efforts of these lobbyist and hoping their efforts benefit the consumer. They are ultimately the ones that this is about, and if they want to take out a loan or use any other service, this should be something THEY decide on.
Washington is the newest state in the news with regards to payday loans. According to the Seattle Times, “The House voted 84-10 early Tuesday to pass a bill that would require lenders to offer extended payment plans to borrowers who get in over their heads. The measure also blocks borrowers from receiving loans totaling more than 30 percent of their monthly income. The bill now goes to the Senate.” Initially there were some provisions that would have limited the amount of interest the consumers had to pay, however that part of the bill was dropped.
Washington adds to the group of states that Leadpile Lead Exchange is keeping an eye on regarding payday lending laws. Some of the other states we are keeping an eye on are AZ, OH, GA and a few others. We will keep everyone updated.
NEW LAW IS A BENEFIT TO LEADPILE AS ANYTHING THAT HELPS THE CONSUMER IS A GOOD THING!
There was some new local news regarding the payday lending industry. Our (AZ) House of Representatives voted Monday against a bill that would allow AZ payday lenders to charge up to 113% APR. According to AZcentral.com, “The legislation would have allowed loans of $200 to $3,000, and they would have to be repaid in five to 24 months. Interest-only payments were prohibited and borrowers could repay loans early with no penalty.” There seems that there should be some happy medium in regards to regulating the payday lending industry, but not necessarily having to eliminate it totally. Where will this AZ payday legislation end? Allow payday loans…. NOT allow payday loans? Stay tuned!
CSOs also known as Credit Service Organizations are unregulated companies that are now doing payday loans and other short term loans like auto title loans. It seems that with some recent payday loan regulations, there have been some that have been able to avoid the regulations because they are a CSO. Credit service organizations offer payday loans and other short term type of loans without any limitations on fees they are charging the consumers. However, they were initially created to help register our credit repair companies, not necessarily be a payday lender. According to the dallasnews.com, “CSOs in Texas were originally established to control credit repair businesses; however, in the past few years, small-dollar lenders are operating as CSOs under a statutory loophole that allows them to obtain “an extension of consumer credit” for borrowers.”
Leadpile Lead Exchange works with all sorts of payday loan leads. These are all consumers that are looking for a short term fix to a temporary problem. Based on this article, CSOs are the ones that are doing some of the lending, not necessarily payday loan lenders per say. Bottom line: as a consumer understand any loan you ever take out and the fees associated with it.
Payday loans, also known as a cash advance, are a very large business in the United States. These short term loans often are under a lot of scrutiny from lenders and government agencies. However, it is hard to ignore the fact that I read that the payday loan industry is potentially lending 50 billion dollars.
These short-term loans are being taken out by people who need cash and possibly their bank, credit union or credit cards are not an option. As I have pointed out before, the average person taking out a payday loan is not what it used to be, or what people generally think of as a “typical” customer. According to Indystar.com, “the average household income for Advance America customer has risen to $43,000, with 90 percent holding at least high school diplomas and half with some college. About half have credit cards.” Indystar.com also goes on to point out that nationally, the number of payday outlets has gone from zero in 1990 to about 25,000 today. However, many choose the convenience of searching online for their short term loan, and then get matched up with companies like Leadpile Lead Exchange to then connect them to that needed payday lender. The fact that this industry is potentially a 50 billion dollar industry, points out that there is definitely a need for these short term loans.
In recent news, another state has implemented regulations regarding payday lending locations. An ordinance was passed in Springfield City, IL requiring a minimum distance between payday loan stores. It appears some legislators are also looking to try and get some regulations implemented about the maximum interst rate allowed on the loans. This is something that is already in place in several states around the US. Leadpile Lead Exchange will keep an eye on this, because we are working a lot with the payday loan industry and always want to keep updated on any new news going on.
A recent post by the Payday Pundit brings light to an interesting article in the Omaha World Herald. This article draws a comparison between the payday loan fees and the health care industry. According to the Herald, “A study of payday loans in the Omaha area concluded that more than $19 million in excessive fees were not spent in other ways last year, with the health-care industry bearing the brunt of the lost dollars.” The article also goes on to say payday loans should not be banned because the alternatives are even worse for those states that have payday loans outlawed. I am confused? Do they want to keep payday loans or get rid of them?
Leadpile Lead Exchange is always looking for news going on with different states in the payday loan industry, however I am a little unclear if this is a article to promote payday loans or an article against payday loans? How do you see it?
There was a recent report by Channel 15, that brought up a study done by Vanderbilt University. In this study it pointed out, “Payday loan customers who are approved on their first application are more likely to file for bankruptcy than those whose initial applications are denied, according to a study out of Vanderbilt Law School. ” I am not sure I understand where this is going as far as trying to point out a bankruptcy filing rate with those that took out a payday loan. The people that could not get a payday loan probably did not qualify for the loans because of some sort of income issue or other specific requirement the payday lenders require. I would think this sort of individual had more potential of falling behind and contemplate bankruptcy, don’t you think?
Leadpile Lead Exchange has been generating payday loan leads for some time now. Blaming or relating bankruptcy filing rates to those that have taken out a payday loan, and not those that have been approved for one, just does not make sense to me. Does this also mean that someone who took out a new auto finance loan is more likely to file bankruptcy, versus someone that applied for an auto finance loan and was denied? There are people that have a lot of outstanding past due debt that I would say is more of a correlation to filing bankruptcy, versus someone who took out a payday loan. Those that did not manage their debts properly, had an expected loss of job, or those that had a major financial change in their life are more of a cause of someone filing bankruptcy. Payday loan = bankruptcy? Payday loan = what else?