Leadpile’s Blog

Easy Money, a payday lender with stores in Alabama, recently joined Borrow Smart Alabama – a TV  campaign aimed at encouraging borrowers to use loans wisely.

The title loan and cash advance industry, under fire for high-interest rates, have smartly recommended regulatory oversight which will help to promote legitimacy. Borrow Smart Alabama is comprised of more than 225 cash advance and title lenders in the state who have committed to a Code of Fair Lending.

Smart Move by Payday’s in Alabama.

The signatures are in……. 422,000 consumers in Ohio signed a petition in order to have the payday lending issue on the November ballot. The governor signed in June a law that puts some limitations on the annual percentage rate the payday lenders can charge. The governor capped the APR at 28 percent, and put a limit on the number of loans customers can take to four loans per year.
Based on the petitions submitted, consumers think they should have the right to make their own decisions when it comes to their personal financial matters. Those that signed the petition also think that allowing the restrictions to go through will force businesses to close and 6,000 employees to lose their jobs.
According to paydayfact.org, all Americans should have the choice to make their own decisions about getting a payday loan. High costs to doing the loan or not, consumers in Ohio want to decide on their own if they need these payday loans. Many Americans are in dire need of some quick cash, and to them these payday loans are the temporary fix. We shall see what the final decision is on this matter come the November election.

In a continuing effort to research all the options consumers have available to them, I came across a type of loan that I have never seen before. The newest and latest way for consumers to get cash is by taking out a cash advance from their home. Currently, consumers that are age 65 and older have often looked at the option of doing a reverse mortgage. This is basically the consumer taking out a loan on their home, but the loan not being paid back till after they pass away. However, it appears there might be another option available to them.
Something new that lenders are looking at is offering consumers cash advances on their home. According to The New York Times, “Owners 65 to 85 with good credit who live in homes valued above $400,000 (above $500,000 in New York and California) can receive a payment of up to 15 percent of a home’s equity.” Something like this costs the consumer no closing costs unlike a reverse mortgage. There are certain stipulations the consumer has regarding the sale of the home, however the simplicity seems to be there compared to doing a reverse mortgage or other lending options. Yet is this a logical choice for consumers? Not everyone has a home valued above $400,000 either.

The options that homeowners now have are:
1. Refinancing
2. 2nd mortgage or lines of credit
3. Reverse mortgage
4. Home cash advance
5. Loan modification

and what’s next?…………………………….

Consumers are looking for anything and everything they can do to survive. Does this mean a potential new lead type for Leadpile Lead Exchange? Let’s wait and learn some more about this new option available.

In the last year many mortgage lenders have been closing their doors. Auto lenders are getting “selective” on who they lend to. Payday lenders are getting put under a microscope because of various features of their loans. There is not one consumer that is not somehow being affected by this credit crunch. Is any of this happening because of the side effects of predatory lending?
In recent years, industry regulators have had an eye on every sort of lender in regards to potential predatory lending. According to Payday Loan Industry Blog, predatory loans are those that were given out to consumers with deceit or misleading information. This could be related to the terms of the loan, the type of loan or anything else related to the loan and what is conveyed to the consumer. In addition, predatory lending could be where a lender is taking full advantage of the consumer. Predatory lending is not necessarily because the interest rates are high or the cost of doing the loan is expensive. Some try to refer to payday lending as predatory lending.
Payday loans are a loan that many need for a temporary loan to get through a unforeseen situation that has occurred. These loans are usually about $500 and secured by a person’s paycheck. Payday loans being a part of the predatory lending arena should not necessarily be the case, because consumers are conveyed the rates and the cost of doing the loan. However, if a lender does not do this or misleads the consumer, then that could be considered predatory lending.
The bottom line is no matter what kind of loan you look at taking out, you need to ask a lot of questions. Understand fully the cost of doing the loan. The more you try to find out, the better chance you have of not becoming a victim of predatory lending-it’s everywhere, not just with one type of loan.
Leadpile Lead Exchange works a lot with payday loan leads, refinance leads, auto finance leads and other types of lending leads. However, predatory lending or misleading consumers is not something that we promote in our marketplace.

Matt Burns of Business First of Columbus had a very nice article today on the situation with the Ohio Payday Ballot.

According to Burns,, Ohio officials have finally finalized the ballot language for the Payday Issue.

The Ballot will read:  “Shall Section 3 of H.B. 545 be approved?” A “yes” vote keeps intact the provision of the law, which caps annual interest rates on payday loans at 28 percent, down from 391 percent, while limiting the maximum loan amount to $500, from $800.

A “no” vote, according to the language, sets the maximum loan amount back to $800 and allows payday lenders to levy a total charge on a loan that “substantially exceeds” 28 percent.  According to Burns, the 391 percent annual percentage rate calculation doesn’t appear on the ballot.

It looks like a Payday Group called Ohioans for Financial Freedom have worked to collect signatures to make sure the repeal makes it on the ballot. They called the language “fair and balanced.” According to Burns, Ohioans for Financial Freedom has until the end of the month to collect and submit more than 241,000 valid signatures to ensure a spot on the ballot.

Stay Tuned my friends. Ohio is in the middle of it.

According to MSNBC today the numbers are in and retailers lost money, even though the 100 billion dollars worth of stimulus checks have been mailed out by the government. So where did all that money go?
A little over 1/4 of the Americans who received these checks used it for paying off some credit card bills. Only 11% used the money on discretionary items such as electronic items and travel.
Grocery stores to retail stores were offering discounts to come into their stores, to spend their stimulus money on THEIR products. Some retailers placed radio and television ads with reference to spending their stimulus checks at their stores. They all have reached for a piece of the pie.
It appears the winners were discount retailers such as Walmart, Target and Costco. The loosers, that were unfortunately not able to benefit, were department stores and clothing stores. So maybe it is a good time to go out there to get some REALLY good deals!!!!!
Another area that felt some negative effects of the stimulus checks was the payday loan industry. If consumers are getting checks from the government, then they don’t necessarily need a payday loan. However, everything seems to be headed back in the right direction for payday lenders/lead generators. Leadpile Lead Exchange focuses a lot of the payday vertical, so our heart goes out to all our affiliates that felt any negative effects of the stimulus checks going out.

We all know there are some tough times going on with most Americans. Right now, Leadpile Lead Exchange is experiencing a surge with the payday loan lead type. Not only are publishers wanting to generate the leads, but the advertisers are needing those payday leads. If your not apart of the Leadpile marketplace, take a look at some of the conversions our publishers are receiving.

There are a lot of payday loan leads being generated, and WE want them to be SOLD here!
There are also a lot of payday lenders needing leads, and WE want them to BUY here!

I wanted to see if I could find some true results of what some Americans want with regards to the payday loan industry. So much negative publicity gets published on this industry, however there really is a need for these short term loans for many people.
According to a previous poll done by zogby.com, less than 1% of all those polled, thought that lawmakers should focus on the personal loan industry. A majority support the individual’s right to choose their financing options, and want that freedom of choice in payday loans.
Zogby results showed that a majority (84%) of Ohio state’s consumers were in favor of making their own credit decisions without government interference. Additionally, most wanted the federal or state governments to allow adults to get a payday loan, if that is something they choose to do.
Another part of this particular survey stated 72% of the consumers mentioned that traditional financial institutions like banks and credit unions didn’t offer short-term personal loans. Many consumers see payday loans as something convenient, and fast to get some needed cash between paydays. These payday loans are popular with loan borrowers for the main reason of convenience and quick access to cash without any credit checks.
Paydays loans are a necessity for so many people today. Is this something that should be controlled by legislation? I agree there should be some regulation so consumers are not taken advantage of, however 100% eliminating loans, that no other banks or lenders can provide, is not necessarily the best option for the consumers needing them. Where else can Americans get a short term loan not secured by collateral? Getting quick, fast money is very hard to find without having your credit pulled.
Leadpile Lead Exchange embraces payday leads because there is some belief that this is something that is needed by the consumers. We bring together those that can generate the leads of consumers that are looking for these short term loans, with the lenders that can provide this to them.

Something very interesting is going to be rolled out- the 1st FEMALE test dummy for the auto industry. That’s right- those test dummies that they put in our cars to test the safety of the car, will now include a female. This will help The National Highway Traffic Safety Administration get more accurate results on automobile testing they conduct on our cars. pretty funny that it is 2008 and this is just now being rolled out.
It’s amazing that you can’t open up a business section of a news website, without seeing something new going on with the auto industry. Gas prices, hybrid cars, SUVs, crash testing and also the auto finance industry in general. The other great thing that is happening with our cars is the new safety ranking that is going to be implemented. This will help all of us with a uniform safety rating system, that will determine safety on the potential cars we want to buy. It’s almost like having consumer reports in your back pocket to help you determine the safest car to buy. Once again… another great thing implemented to help out the consumer.
I hate saying it, but maybe this gas and lending crisis is pushing some buttons on some very needy things that had to happen in this world (more fuel efficient cars, lending laws that just don’t allow ANYONE to get a loan, and now some uniform safety standards to protect the consumers). We all know auto finance will be a popular vertical in the lead exchange space, and maybe this is just the beginning of it just changing a little in favor of the lenders, and what they can do with the loans they are giving out.

Once again- glass half FULL or half EMPTY?

The Following is a from Bankrate.com by Laura Bruce, September 12^th, 2005. I thought this would be an interesting post for People following Online Payday at the Lead Exchaneg Blog.

It’s a tempting alternative to walking into the check-cashing store on the corner. Online payday lenders are popping up on the Internet, offering fast, short-term loans to cash-strapped consumers, in the anonymous comfort of cyberspace.

But if you borrow from these businesses, you might have more to worry about than the astronomical interest rates traditionally associated with payday lenders in general.

For starters, you’ll provide an amazing amount of personal data — Social Security number, driver’s license number, mother’s maiden name and, of course, your name, address and employment information — to the Web site.

You’ll also give your checking account number and bank routing number, so the lender will have access to your account. The lender will deposit your loan into your checking account and dip into your account to extract interest, fees and the principal. Some require that you fax them your latest pay stub, most recent bank statement, photo ID and a voided check.

But to whom are you giving this information? More than likely you won’t have a clue. Many Web sites that pop up when you do a search for something such as “payday loans” aren’t lenders at all. Take Advance Cash Loans, which states at the bottom of its home page, “Advance Cash Loans is not an online provider of online payday cash advances. We simply connect people seeking fast cash advances with online providers of instant cash advances so they can get the advance cash that they need, as soon as possible.”

A Consumer Federation of America (CFA) survey, of 100 online payday lenders and referrals sites, found that many are run from outside the United States and, perhaps, out of reach of American laws.

“You don’t know where your information is going,” says Jean Ann Fox, director of consumer protection at CFA.

“Many times you can’t find who the domain is registered to. There are Internet payday lenders outside the country, in Canada and on islands in the Caribbean that you can’t find with a magnifying glass. It’s like handing a stranger a blank check.”

Bankrate.com tried to contact three payday lenders. Only one could be contacted, and no one there would answer questions or return calls.

Are these businesses fly-by-night scammers that will steal your identity, trap you into budget-busting, long-term borrowing habits, or illegally siphon money out of your bank account? Nope, not necessarily. But you should think long and hard before sending your information to companies that are so stingy about their own information, Fox says.

“If you borrow from them, you’re not seen in line at the corner payday lender, so there’s privacy and that might be a selling point. But I hope it’s offset by sending all that personal information over the Internet. It’s a financial strip search. They want every piece of your financial information. People should be afraid to provide that information. I wouldn’t want to give that to someone over the counter, much less over the Internet.”

Traditional payday lenders — the so-called brick-and-mortar shops — are represented by Community Financial Services of America, a trade association. Online payday lenders have no such organization and, therefore, have no one to represent them. But Andy Jacob, CEO of Leadpile.com, a company that seeks leads for salespeople in the cash-advance business and other industries, calls the growth in online payday lending “explosive.”

“What’s happening in online is happening fast and furious. The major players are trying to position themselves to be the leader online. It’s a bifurcated space right now. There are many players that are lead generators that aren’t in the payday loan space and they’re attempting to secure the lead to themselves. Many payday-loan companies are late to the game. It’s challenging to figure out which company is doing what right now.”

The growth of online payday lending is presenting problems for state law enforcement officials and consumer advocates. Earlier this year, the Massachusetts Office of Consumer Affairs and Business Regulation ordered 91 companies marketing Internet payday loans to stop. The companies were reportedly charging annual percentage rates averaging 300 percent and fees averaging $30. The state says none of the companies were licensed to offer loans to residents.

Some of the letters we sent to these companies were returned when the post office was unable to find the address,” says David Cotney, senior deputy commissioner at the Massachusetts Division of Banks. “That reinforces our concern about consumers handing over personal information. That’s one of the reasons licensing is required; it gives the consumer some recourse.”

James Brusselback, enforcement chief at Washington State Department of Financial Institutions, says his division is investigating some 10 online payday lenders.

“The difficulty with the online outfits is in locating them, and then some of them claim that our state law doesn’t apply to them, so we have that issue of trying to bring them under our state law. I guess part of their argument is that they’re not located in the state and that their home-state law is sufficient to protect their customers. The requirements in those states — Nevada and Utah — are far less than what we require.”

Karolyn Klohe, financial legal examiner in Brusselback’s department, says consumers can have a tough time stopping online payday lenders from taking money out of their accounts.

“A common complaint against online payday lenders is that the customer is required to give banking information, whereas if they walk into a payday lender store they give them a postdated check. But what’s happening online is the payday lender uses the bank information to make unauthorized withdrawals from the consumer’s account. They say they’re collecting funds owed to them. They can make these withdrawals in a way they can’t with a postdated check.”

Turning to a payday lender — online or on the corner — is almost universally discouraged by consumer advocates. But the alternatives can seem thin to someone who needs cash to see them through to the next paycheck. Many banks offer bounced-check protection plans that consumer advocates often equate with payday lending. A notable difference, perhaps, is that the consumer is less likely to be able to overdraw several times and end up owing money they probably can’t repay.

“The long-term solutions include getting a good spending plan and building a nest egg of savings,” says Fox. If you can afford to pay $45 every payday to keep a $300 loan from bouncing, then you can afford to save it so you don’t need to borrow in the future.

“Pawn shops are cheaper than payday loans. On rare occasions you can ask your employer for an advance. Negotiate directly with whomever you owe. Get a second job. Put off purchases until you can pay. None of these are comfortable. It’s appealing to write the check without having money in your checking account and walk out with cash, but it comes at a high price.”

In their survey of Internet payday loan sites, CFA found that loans of $200 to $2,500 were available, but $500 was the most-frequently offered. Finance charges ranged from $10 per $100 up to $30 per $100 borrowed. The most common rate of $25 per $100 translates into an annual percentage rate of approximately 650 percent if the loan is repaid in two weeks.

Many states have passed laws regulating payday and small loan laws. Consumer Federation of America has compiled important information that consumers should be familiar with before borrowing.

According to the AP,  Ohio Attorney General Nancy Hardin Rogers has refused to approve petition language proposed by payday lenders seeking to overturn a law that tightens industry regulations. As I have been writing about for the past two weeks, the Ohio situation could have been avoided by a better compromise up front.

Now it gets bloody. Let’s see who flinches first here. The Payday Industry or the AG.

Are you wondering why Payday/Cash Advance companies refuse to take or buy leads that are active military?

Octorber 1, 2007, U.S. Congress passed the Military Lending Act that bar lenders from charging military or their family with dayday loans that will trap borrowers in debt and typically carry high annual interest rates.  The Military Lending Act will only allow lenders to charge up to 36% annually for any service members and their families.  The law says Payday Lenders cannot hold onto the service members personal checks or have electronic access to their bank accounts as a collateral for this type of loan.  This will allow active military to get loans with higher interest than a credit card but still far below what a payday loan charge.

Many companies out there are finding ways to focus strickly on Military loans to offer them other alternatives to loans.  There are many websites that are only interested in Active Military.

Many new laws are now starting to come up that are trying to restrict lenders from high rates.  My personal opinion is that a payday loan is simply just that a “PAYDAY LOAN.”  If you are interested in a longer loan (a few months term or more) then go to your nearest bank and apply for a personal loan, I can guarantee you it won’t be as easy as a payday loan and the interest will still be high.  All these laws being passed yet its not the lenders fault that these consumers are borrowing money and commiting to pay it back by their next paycheck, then become highly upset because they are not able to pay it back.  A payday loan was design just to borrow money and help you pay those important bills till your next payday.

I just wanted to let all our readers understand why there is not a strong demand for military leads.  In our marketplace however, we do have a demand for them.  If you have military leads bring them here, we have a source that offers alternative and is highly interested in that lead type!