Posted on 07/11/2010 11:35:21 AM PDT by Lorianne
PHOENIX — Another payday lending company’s decision to leave the state shows the expiration of a law that allowed high-interest loans is working, Arizona Attorney General Terry Goddard said. Advance America Cash Advance Centers Inc. announced plans this week to close all 47 of its locations in Arizona, along with 75 locations in several other states.
The Spartanburg, S.C., company made millions “off of a business model that preyed on vulnerable borrowers,” Goddard said in a news release Friday. “They could have amended their business practices like other companies and charged lawful rates, but they chose to fold their tent here,” Goddard said. “That’s just what Arizona voters hoped would happen when they rejected this industry at the polls.”
Payday lenders write checks for short-term loans while charging fees that can amount to interest rates of more than 400 percent on an annual basis. A decade-old law allowing the high-interest loans expired June 30, and lending companies unsuccessfully tried to persuade voters or the Legislature to extend it.
State law now caps the annual interest rates for loans at 36 percent. Advance America spokesman Jamie Fulmer said last month that the end of payday lending could force customers looking for cash to turn to unregulated Internet loans. “The consumers who find themselves between paychecks with some type of unbudgeted or unexpected expense should be very concerned about the options left,” Fulmer said.
Goddard announced a program last month to pursue payday companies that continued operating as usual after the law changed. His “Operation Sunset” plan includes a task force, public education campaign and consumer hot line. According to the state Department of Financial Institutions, there were about 600 payday loan stores in Arizona last month.
(Excerpt) Read more at industry-news.org ...
No love fur usury.
How many jobs does this idiot action kill?
Is this good or bad?
“No love fur usury.”
I’m with you. Since biblical times, some people have ALWAYS used super-high interest rates to screw over others and wreck their lives. I have absolutely no problem with government putting a stop to this abuse (and yes, I am a fellow right-wing extremist - see all of my other thousands of postings).
Leave loan sharking to the mob, where it belongs.
That depends on whether the people who patronized these businesses were competent to decide for themselves whether the interest they paid on their loans was reasonable to them. I am not qualified to judge other people's competence in such matters. That is what government is for. (/sarc)
None that don’t have a net negative effect on the overall economy.
I'd really love for you to prove that assertion somehow.
I don’t like the places one bit but I say still let the free market decide.
In my opinion good. Yes, some jobs (not many, in the scheme of things) will be lost initially, but the crooks will be out of business. Those loans were so incredibly usurious as to be criminal. No “business” that preys on the desperate should be allowed to get away with it. If a lawful and reasonable rate of interest can’t satisfy them, then to heck with them. Fold your tent and go.
None that matter. These places are staffed basically by the same people that staff Circle K. Meanwhile the places are crookeder than the mob and their favorite demographic to sucker into their scheme is military personal. We should have run them out of the state ages ago with pitchforks and torches, expiring the law that allowed this sleaze will have to do.
Both. One has to ask why people would take out short-term loans where the expense (if extrapolated for a full year) is extremely high. Most people are irresponsible (and would generally be better off if a nanny government government prevents them from taking out an expensive loan.) Some people, on the other hand, have short-term emergencies (such as medical bills, rent, etc.) Where a "fee" of $59 for a short-term loan is better than the alternative of bouncing a check or missing a payment.
However, you seem to have no problem with the risk that businesses like this have to take on bad checks. They charge higher interest rates because they take more risk.
This is the “right wing extreme” thinking that got us FannieMae and Freddie Mac housing bubble.
Sorry, if you need to cash a check and Advance America is all you can go to, you’ll be pretty sad that they left. Rent a Center too. I’ve had to use both and were glad they were available.
However, you seem to have no problem with the risk that businesses like this have to take on bad checks. They charge higher interest rates because they take more risk.
This is the “right wing extreme” thinking that got us FannieMae and Freddie Mac housing bubble.
Sorry, if you need to cash a check and Advance America is all you can go to, you’ll be pretty sad that they left. Rent a Center too. I’ve had to use both and were glad they were available.
Absolutely! Payday lenders have ruined long standing FAMILY businesses all over.
It would be better, ideal maybe, if those people learned to be more responsible. But until that happy day arrives, A high interest rate for a week or so at a time is the price of handling money poorly.
Sorry for the double post.
Basic economics is best learned young.
Though it is not a simple subject, I suppose you could try to teach yourself if you were sincere in your question.
Start with Hayek's Road to serfdom.
There is a reason every religion out there condemns excessive interest. Over the centuries the negative effects the practice has on societies is as easy to see as the negative effects of incest.
Yep! Leave loan sharking to the professionals.
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