Leadpile’s Blog

In recent news, Ohio is facing some potential stricter payday loan regulations. New restrictions such as giving consumers at least three months to pay back loans of $1,000 or less, forbidding lenders from getting around the 28 percent interest cap by imposing phony fees, requiring payday lenders to follow some of the federal fair debt collection rules in place for third-party debt collectors, and possibly imposing fines for violations of the law(s). This new bill is being referred to as “HB 209″, however it seems not all legislators are looking to support it.

Let’s see how this new potential legislation pans out. Leadpile will be watching.

Paydaypundit.org pointed out VA is the next state to experience some payday loan criticism. It seems some politicians are trying to eliminate the short term loans, yet ignoring consumer needs to obtain money in this tight economy.  Many who do not oppose the short term loans, believe eliminating payday loans only forces consumer to resort to the more expensive methods of obtaining money.

Payday loans are certainly everyone has their opinion about, however don’t we think that the decision should be left up to the consumer and not the government. Leadpile wonders what would consumers do if they did not have this as an option in tough times.   

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!

In recent news, Ohio’s new payday lending law might not be going as smoothly as they had planned. According to dispatchpolitics.com, the public thought the commerce department (who regulates the payday lending industry) would be able to control the payday lenders from charging high interest rates on the short term loans.  It seems Ohians are getting around these new payday lending laws by offering short term loans under the Ohio Short Term Loan Act.  It seems they are trying to do anything possible to get around this newly implemented law.  Leadpile Lead Exchange will be keeping an eye on this to see if it affects the future lending laws of other states.

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.

In recent news, South Carolina is the next state to be heading in the direction of payday lending regulations. According to the Augusta Chronicle, the South Carolina house of representatives has passed a bill preventing consumers from taking out more than one payday loan (up to $600) at a time. In addition to the number of payday loans being potentially allowed, the bill requires the industry to allow customers to go into a extended payment plan if they can’t meet that deadline (without incorporating more fees). This bill is now going to be headed to the Senate to be voted on. If this passes this is just another state that is cracking down on payday lenders. Leadpile Lead Exchange will be keeping an eye on this.

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?

The new year is here and there still is a credit crisis that Americans are trying to figure out how they are going to get through. Many of my other posts talk about credit and ways to know your financial situation, therefore you know what you are getting into with any “new” loans etc. One way some get through these problems is with a payday loan/cash advance. Payday loans get a lot of negative publicity because many feel they are not an “appropriate” way to get out of a temporary situation. Each consumer has their own way of fixing their financial situation, but I thought this quote was pretty interesting in regards to payday loans (Payday Pundit).

How much debt a person has does not determine whether a payday loan is a good idea for them. If the loan enables them to repair their car so they don’t lose their job or saves them from eviction, then it’s a good idea even if they owe a million bucks. And it’s also a good idea even if it just saves them a few dollars in alternative fees that they would otherwise have to pay. People know their individual circumstances and are in a better position to know if a loan is good for them than the lender or any government formula put together by activists and politicians who want to pride themselves on how they are protecting us from ourselves.

Every loan is a gamble on the part of both lender and borrower, and nobody can ever guarantee that any loan can ever be repaid. If both the lender and the borrower mutually agree that the transaction is likely to further their interests, then who are you or any government agency to tell them that they can’t engage in it? If the lenders are tricking people into expecting one thing but delivering another that of course is deception which should be stopped, but apart from that, BUTT OUT, MAN!

If lenders have a responsibility to investigate the finances of people who apply for loans to make sure they can afford them then so do all other merchants and service providers. Is that the kind of society you want to live in? When you are the one who has to get government permission to purchase a product or service then you may feel differently about making politicians our parents instead of our servants.