Tag: Payday Loan Legislation

22
Apr

Payday Loan Business-Center for Irresponsible Lending at it Again!

Yes, the CRL, Center for Responsible Lending, who we in the payday loan industry like to refer to as “The Center for Irresponsible Lending” has done it again. They “helped craft” new federal legislation with the aid of U.S. Sen. Kay Hagan, D-N.C.

The bill, called The Payday Lending Limitation Act of 2010, would modify the Truth in Lending Act. Senator Hagan will introduce it as a standalone today, and again next week as an amendment to the financial regulatory reform bill making its way through the Senate.

And just who is The Center for Responsible Lending?

Herb and Marion Sandler! According to ActivistCash.com:

“Herb and Marion Sandler are the billionaire founders of the Center for Responsible Lending. The Sandlers made a fortune in the subprime mortgage industry, thanks to the success of their bank, Golden West Financial.

Golden West and its subsidiary, World Savings Bank, were among the biggest sources of subprime mortgages, especially of adjustable-rate loans called option-ARMs. Herb Sandler is credited with the invention of the option-ARM, which his bank marketed as “Pick-a-Payment” mortgages. These loans were extraordinarily popular in the years preceding the subprime mortgage crisis, generating billions in profits for the Sandlers’ banking empire.

Recent exposés by “60 Minutes” and the New York Times have focused national attention on the Sandlers’ role in the subprime crisis. The Sandlers’ loans, described in the Times as “the Typhoid Mary of the mortgage industry,” are part of a second wave of toxic debt predicted to default over the next several years, hitting the economy with another $600 billion in losses.

The Sandlers made over $2.3 billion on the sale of their company to Wachovia in 2006, and they have used their fortune to fund organizations advancing their political aims. They have given millions of dollars to left-wing groups, including ACORN (radical activists implicated in election fraud investigations in over a dozen states), and the Center for Responsible Lending (a “consumer advocacy” front-group that lobbied for expanded subprime lending while promoting its funders’ business interests).”

Read more about the CRL Here:

And more here about the Proposed Bill:

20
Apr

Federal Payday Loan Legislation

Fredreka Schouten at USAToday.com has an informative article describing the payday loan industry’s lobbying efforts in Washington DC. They reported that CFSA, The Community Financial Services Association, representing roughly half of all brick-n-mortar payday loan operators spent $2,6000,000 in 2009 compared to The US Chamber of Commerce at $3,000,000.

USAToday.com also mentions OLA, The Online Lenders Association, and their efforts to lobby on behalf of Internet payday loan lenders in Washington DC as well.

USAToday.com further reports, “A bill that recently passed the Senate banking committee could shield some of the industry from the new agency’s enforcement powers, but a House-passed version would make the lenders subject to full enforcement by the proposed Consumer Financial Protection Agency.

The fight now moves to the full Senate, which may take up the bill later this week.”

With an average loan to payday loan consumers approaching $345, it seems crazy to us for the crew in D.C to be focused on the payday loan industry. After all, it’s not as if the payday loan industry contributed to the “too big to fail” mantra currently consuming Big Brother.

Read the entire USAToday.com article here.

07
Mar

Washington Payday Loan Law

Washington State payday loan laws in a nutshell:

The Washington State payday loan law limits the size of a payday loan to 30 percent of a person’s monthly income, or $700, whichever is less. It also bars people from having multiple loans from different lenders, limits the number of loans a person can take out to eight per 12 months, and sets up a database to track the number of loans taken out by people.

Payday loan limit is capped at $700.00 or 30% of gross monthly income, whichever is less.

A statewide databases established so that payday lenders can track their borrower’s loans.

If a person is not in a position to repay on time, they can ask the lender for an installment plan, which the lender must provide free.

Payday loan lenders may not harass people who can’t pay

Payday loan consumers have access to 8 payday loans per year.

10
Oct

Payday Loan Lenders – ATM Fees – Overdraft Fees = 400 Percent APR

The payday loan industry is becoming more sophisticated and reaching deeper into their pockets in order to thwart negative payday loan legislation.

A link over at Nick’s PDL Industry Blog brought this to our attention.

Payday lenders are gearing up for an alternative strategy. The industry believes it has found new support in arguing that payday loans, with annual interest rates that can reach 400 percent, are a cheaper alternative to overdraft charges. The industry is citing a recent USA Today analysis based on data from Moebs Services, an economic research firm. According to the analysis, consumers pay an overdraft fee of $26.68 every time they overdraw their account. So if consumers overdraw by $100, they’d pay an annual percentage rate (APR) of 696%, if the credit is paid back in two weeks – compared with an APR of 450% on a $100 payday loan with an average fee of $17.25, according to USA Today.

“The focus on overdraft protection on the Hill has helped legislators to understand that payday lending can be looked at as a cheaper alternative to overdraft charges,” said Steven Schlein, a spokesman for the Community Financial Services Association, the trade group for payday lenders.

30
Sep

Payday Loan Law – South Carolina Payday Loan State Data Base

South Carolina has turned down an appeal protesting its previous decision to award a contract to Veritec Solutions for the establishment of an online database system for tracking payday loans applied for by residents of South Carolina.

The South Carolina chief procurement officer for the Information Technology Management Office, Mike Spicer, denied the protest by the Prism Group and the Tom Sawyer Group. The companies have 10 days to file an appeal.

The two South Carolina companies protested the award to Veritec claiming the award was arbitrary, erroneous, and in violation of state law, along with allegations the award made was not the best for the state of South Carolina.

Veritec already maintains several other payday loan state data bases. They proposed a fee based system that may collect up to $15 million over five years. The Prism Group and Tom Sawyer Company proposed a system that could collect $8 million over the same period.

The payday loan data base system is required under new South Carolina payday lending rules passed earlier this year.