Leadpile’s Blog

According to MSNBC on Friday, one Illinois city is trying to get a grip on payday lenders in it’s city.  One councilwoman is proposing a moratorium on payday loan companies that are setting up shop there.  The number of payday stores in their area have nearly doubled, and they want to put a stop to that.  This city is looking to control the number of stores either by some sort of licensing or zoning to control the number of stores allowed in a particular area.  According to the article, other cities around the country have enacted these sort of regulations.  So is this maybe the beginning of this state trying to outlaw payday loans?  We will see.
Currently, there are certain states that have state specific lending laws for these payday loans. Some states have a limit on the finance charge percentage, amount the consumer can borrow, limits on the fees that a lender can charge, and if payday loans are even legal in that state.

The Leadpile Lead Exchange believes that repsonsible Payday lending is the key to long term success for both the Lenders and the Borrowers. We wish all the best of luck.

Payday lenders in Arizona should be open for business until at least 2010. Yesterday, a group called Stop Payday Loans withdrew their proposal to shut down Arizona’s payday-loan-industry. They needed at least 153,000 signatures to get on the November ballot, and they were only able to collect 30,000 signatures. The group now says they will focus on reform rather than on repeal. Things could get interesting as we approach for 2010, but for now let’s hope ethical, helpful, non-predatory lending will continue.

The Sandusky Register had a very interesting piece today about the Online Payday Industry. I think it is very worth a read. Here is the viewpoint in its entirety. It really raises some very good questions about the need for loans.:
“Let’s be clear on one thing: Payday loans, like the pawnshops they supplanted in our economic infrastructure, ought to be considered a last resort. But they shouldn’t be a nonexistent resort. However, if the payday loan lobbyists are to be believed, the state legislature’s recent action to restrict interest rates and other lending practices unique to the payday loan industry will have the effect of legislating an industry out of business.
That’s the part we’re against. Good riddance, you may say. It’s an industry that makes its money off people in dire economic straits. But for some people, the interest rate is an acceptable alternative to bouncing a check for a bill and owing the bounced-check fee on top of that. A bad option is still an option, when you have no other options. Yes, there are people who treat payday loans as a convenience, that any kind of loan is really some sort of free money. Those people pay for that attitude in lousy credit ratings and the sort of high interest rates charged to high-risk borrowers. Waste no pity on them. Live within your means, or better your means, others argue. We say, let those high interest rates serve as an incentive to do just that. Believe it or not, a great many people prefer to pay their own way in life, and work their way out of the depend-on-daddy cycle as soon as they can. A payday loan can be bitter medicine, taken only as needed. But there are those who, when they need it, genuinely need it. Bitter as the medicine is, it shouldn’t be withheld.

The U.S. lost jobs for a fifth month and the unemployment rate rose by the most in more than two decades, as an influx of students into the workforce drove the biggest jump in teenage joblessness since at least 1948. Payrolls fell by 49,000 in May, the Labor Department said today in Washington. The jobless rate increased by half a point to 5.5 percent, higher than every forecast in a Bloomberg News survey.

What does this mean to some online Companies? For Companies specializing in assisting consumers with Payday loans, Debt Consolidation Programs, BK Services, and services for the under banked may flourish as more and more people need more help.

Ohio Gov. Ted Strickland has signed a controversial bill on the state’s payday lending industry. House Bill 545 caps the annual percentage rate on payday loans in the state at 28 percent, down from the 391 percent maximum currently permitted. Among other provisions, the bill also limits consumer borrowing at $500 or 25 percent of base monthly pay per loan, restricts borrowing to four times per calendar year and extends the term of a loan to 31 days from 14 days. According to Business First of Columbus, The legislation’s 90-day window closes at the end of August, when some of the more than 1,600 payday lending shops in the state already have indicated they’re planning to shut down. Lenders have said that among the law’s provisions, the new APR cap could hurt the industry by making their short-term loans unprofitable. H.B. 545, which was introduced in the House April 29, cleared the Ohio Senate May 14. Let’s hope Ohio has not overreached causing pain for their own constituents.