Tag: http://www.PaydayLoanLegislation.com


Arkansas Payday Loan Industry

Arkansas payday loan companies get creative! Nothing new here.

Roughly one-third of the payday loan companies Arkansas  Attorney General Dustin McDaniel ordered to shut down or face the possibility of lawsuits have remained open and restructured their businesses to avoid state regulation, an advocacy group said in a report released Wednesday.

The report by Arkansans Against Abusive Payday Lending reported that 55 of the 156 payday lenders McDaniel targeted with cease-and-desist letters are open.

The Report indicates the lenders have adopted payday loan models in an attempt to circumvent regulations of the Check Cashers Act and the recent crackdown by Attorney General McDaniel.

McDaniel told payday lenders they would face lawsuits if they did not shut down by April 4, and 101 lenders closed in response. The attorney general in May filed lawsuits against 20 payday lenders that he said were violating the state’s constitution by charging high-interest loans.

Arkansans Against Abusive Payday Lending said that the total number of payday lenders operating in Arkansas has dropped from 237 in March to 136 this month. McDaniel’s office has said he focused on companies that offer “deferred presentment loans” where the businesses not only exchange cash for a check but also agree to delay the depositing of the check for a specific time.

The Arkansans Against Abusive Payday Lending organization said that the majority of payday lenders targeted by McDaniel but still open are now operating what they call a “money order” model where payday loans are offered at an interest rate of 8.98 percent annually. The loan is issued in a corporate check or money order. The borrower is asked to endorse the corporate check and it is cashed for an additional fee of 10 percent of the check’s amount.


Ohio Payday Loan Laws Update

Ohio’s attorney general has approved proposed language
for use in a petition drive seeking to repeal new payday loan regulations set to become effective in 2009.

Supporters of the payday loan industry required AG Nancy Hardin Rogers to OK the language for petitions seeking to get a referendum for the law’s repeal on the November ballot.

Rogers approved as “fair and truthfu”l the petition drive’s summary of the pertinent portion of the law.

The new law, if it actually becomes effective in 2009, caps annual interest rates at 28%, down from 391%.

Gov. Ted Strickland on June 2 signed the bill that puts the new restrictions into effect. Payday lending businesses point out that the law change would force them to close offices, lay off thousands of employees, and remove another financial choice Ohio residents currently have .

Rather than regulate the payday loan product out of business, if the new law were to take effect, it would force Ohio payday loan consumers to apply for payday loans via the Internet or call centers.

Regulators cannot put an end to demand for payday loans! At best, they simply force consumers to reveal their social security and bank account information to payday loan companies residing in other states or offshore.

Additionally, the state loses the revenue derived from licensing and auditing, employment and sales taxes. It’s ridiculous!! Why not let the market dictate rates and fees by allowing competition to exist? Guess they THINK they know what’s best for ALL of us.


Canada Payday Loans Manitoba

Manitoba Provincial legislation to put a cap on interest rate loans takes
effect this fall. The province has approved the rate upheld by the federal
Criminal Code, to set maximum interest rates for short-term loans.

Manitoba’s Public Utilities Board has ruled that interest rates will be
capped at 17 per cent for loans under $500.

The limits on interest rates charged by payday loan companies will be
determined by the size of the loan.

It allows payday loan operators to charge a certain rate for certain sizes
of loans.

A “payday” loan is anything up to $1,500 dollars on a short-term basis.
However, the Public Utilities Board has said you can charge up to 17 per
cent until you hit one-third of net pay of the loan ($500) then the interest
rate drops to 6 per cent off the total loan.

It was pointed out that 6 per cent on an annualized rate is still 144 per
cent interest that consumers must pay.

The interest rate on at 6 per cent on a two-week loan equals about 144 per
cent a year.

The goal was to strike a balance between protecting consumers and having the
short-term credit product available to consumers.

See http://www.PaydayLoanLegislation.com for more information.