THE BLOG

26
Mar

Washington Payday Loan Laws

This is an interesting concept: if both sides of proposed payday loan legislation hate it, perhaps it deserves a second look.

The state of Washington, like many other states, has payday loan legislation introduces every year. Rarely does it go anywhere. Payday loan proponents typically want zero controls placed on their product offerings and proponents of payday loan legislation want the industry driven out of business. So, usually the bills go nowhere.

Washington state Representative Sharon Nelson (D-Maury Island) has introduced payday loan legislation this session that both sides find disgusting! Is this what it takes to get payday loan reform bills passed?

In essence, the proposed payday loan bill would require:

  • Payday lenders would be required to establish a statewide database to track all borrowers
  • Payday lenders would be required to establish a statewide database to track their incomes
  • Payday lenders would be required to establish a statewide database to track how many loans they have outstanding.

In her past life, Rep.Nelson created loan packages for Bank of America. Her bill, she says, “Recognizes that for some folks, payday lending works, and it also recognizes that for other folks it does not work and we need to establish a program to help them get out of debt.”

Interest-rate caps have resulted in the industry picking up stakes and leaving. Consumers are then forced to go to the Internet, call centers, or drive across state lines to get a payday loan.

Nelson told the Seattle News that leaders of various Latino organizations state payday lenders provide much-needed services. Ligia Velasquez, one of the planners of Hispanic Legislative Day and a board member at the Statewide Poverty Action Network, says the cheap check-cashing and wire transfers offered by payday lenders are valuable to many Latinos. Cristobal Guillen, president of the Association of Washington State Hispanic Chambers of Commerce, testified at a Feb. 10 House hearing on Nelson’s bill that payday lenders are some people’s only source of credit.

Nelson says her bill focuses on creating a balance between shutting down payday loan businesses and protecting consumers.

Specifically, Rep. Nelson’s bill would:

  • First, it would limit to eight the number of loans a person can take out during any calendar year.
  • Second, it would set a maximum amount that customers could borrow at any one time: 30 percent of their monthly income or $700.
  • Third, payday lenders would be required to offer a payment-plan option without additional fees to borrowers, giving them up to 90 days to pay debts up to $400, and 180 days for anything larger. Currently, the law requires the installment-plan option after four loans.Borrowers also wouldn’t be able to take out another loan while on an installment plan.
  • Finally, payday lenders would be required to establish a statewide database to track all borrowers: their incomes, how many loans they have outstanding, and whether any are on installment plans.

Dennis Bassford, CEO of Moneytree, wondered why banks and other retailers shouldn’t have to create statewide databases for credit-card holders, who’ve also been known to get in too deep.

On the other side of the proposed bill is Rep. Appleton, one of 10 House representatives who voted against the measure. She objects to allowing eight loans a year. Additionally, she wants a mandatory 30-day gap between loans, as well as a 36% interest-rate cap.

Ultimately, payday loan industry opponents are supporting the bill in the Senate, including the Washington Community Action Network and King County Councilmember Larry Gossett. A Gossett representative read a letter to the committee on Monday offering support for the bill. The committee is expected to vote on the bill next Monday.

25
Mar

Payday Loans: West Virginia

West Virginia Attorney General Darrell McGraw Is suing seven Internet payday lenders and five bad debt collectors

AG McGraw wants to bar them from continuing to offer payday loan products and collect bad debt from residents of Virginia. Because the usury rates for payday loan operators are so low, payday loan Internet operators em[ploy the choice-of-law model.

McGraw said Tuesday his office filed two lawsuits in Kanawha County Circuit Court, one against the lenders and one against the collectors.

Additionally, McGraw wants the companies to comply with his subpoena demands. Because the Internet companies are not located physically in West Virginia, they are resisting his efforts. Too bad they are not using the offshore or sovereign nation models!

20
Mar

Payday Loan -Idaho Payday Loan Law

BOISE — A Senate Committee has approved a bill that will negate all payday loans issued to residents of Idaho by payday loan companies not having an Idaho payday loan license.

The bill would invalidate any loan provided by an unlicensed payday lender.

Republican Sen. Shawn Keough told the Senate Commerce Committee Thursday that the bill would be a powerful consumer protection tool because the state Department of Finance could issue cease and desist orders and sue unlicensed payday lenders.

The bill passed with a unanimous voice vote. It now goes before the full Senate.

This proposed Idaho payday loan bill will address the multitude of Internet based payday loan lenders doing business in Idaho.

04
Mar

Payday Loans Video Advertising and Youtube

As video becomes more and more pervasive, payday loan companies are figuring out how to use the Internet to get their messages in front of consumers. Receiving fair treatment from the media is virtually an impossibility for the payday loan industry. The bias exhibited by newspaper and television reporters is so blatant it sickens me! Thus, every opportunity and method of getting our message out must be explored and utilized. This includes Youtube, Facebook, Twitter, MySpace…

Here is an example of some video work by Check-n-Go:

There are many free methods of advertising your payday loan web site or your brick-n-mortar. YouTube.com is just one. Craigslist.com is another. And as mentioned earlier, Youtube, Facebook, Twitter, MySpace… and new ones entering the marketplace everyday are great ways to get in front of your consumers.

When planning to use video, simplicity is the key to success. I suggest you start with the a simple, inexpensive stand with a remote for your smart phone like this one:. It’s EXTREMELY simple, it offers great quality, it comes with super, easy to use, built-in software enabling you to upload your video to Youtube in minutes WITHOUT the need to read an owners manual! Here’s a link:
I bought mine at Amazon with free shipping and we were using it within just minutes of it’s arrival!

Keep in mind, not only can you create video of your customers but you can focus on your location, your employees, maps, your products, your services… You’re only limit is your creativity.

Finally, if you’re not really into this new media, tap the talents and hobbies of your children, your employees, your spouse… We’re experimenting with having our customers submit videos for a $500 prize! The best one will be posted on YouTube. We’ll run the contest for several months and hopefully receive 1000’s of views and some notoriety.

So… what do you think? Can this strategy make you some money? Let us know your results!

04
Mar

Payday Loan Laws in British Columbia – Canada

Canada: British Columbia announced new regulations capping total charges for payday loans offered in the province at $23 per $100 loaned including all interest and fees.

Additional British Columbia payday loan regulatory changes include:

A payday loan agreement between the payday lender and the payday loan borrower must be created that sets out all charges, terms and conditions.

Payday lenders must also display posters and signage showing their rates and fees.

Payday loan borrowers will have the right to cancel their payday loan by the end of the following day, without paying any fees.

Payday loan lenders will not be able to collect repayments on a payday loan directly from the borrower’s employer, or get unrestricted access to the customer’s bank account.

Payday loan lenders will not be allowed to ask for repayment of the loan before the borrower’s payday.

Payday lenders will not be able to issue more than one loan to a borrower at a time, and rolling one loan into another with new charges attached will also be prohibited.

Payday loan lenders will not be able to issue a payday loan for more than 50 per cent of the borrower’s next paycheck.

There has been significant growth in the short-term, payday loan lending industry in British Columbia in recent years. There are about 250-300 payday outlets in British Columbia.

As of Nov. 1, 2009 payday loan companies in B.C. will need to be licensed by the Business Practices and Consumer Protection Authority (BPCPA).

Payday loan borrowers will have the ability to resolve complaints outside of the courts. Furthermore, the BPCPA will have the tools to ensure industry compliance once the rules come into effect. The regulations will be reviewed in two years.

“These measures will help consumers clearly understand the costs associated with payday loans and assist those who find themselves in over their head financially as a result of repeatedly using payday loans,” said Scott Hannah of the Credit Counseling Society.

The B.C. government introduced payday loan legislation in the spring of 2007 and it was passed in the fall. The regulatory changes being announced today follow changes the Federal government made to the Criminal Code that year to allow provinces to set their own rates for payday lenders.