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San Jose and Santa Clara County City Leaders Push For Curbs on Payday Lending
April 25th, 2012
South Bay officials are moving to crack down on payday lending in the coming weeks
In a meeting Wednesday night, San Jose’s planning commission will consider a proposal to bar payday lenders from setting up shop in low-income neighborhoods. Next Tuesday, Santa Clara County supervisors will decide whether to make their temporary ban on all new payday lending establishments permanent. “We’re zoning them out of existence,” said Supervisor Dave Cortese. “This isn’t spot-zoning or redlining certain areas. We’re saying we don’t want them anywhere.”
Increases
Although the number of storefronts has declined in California in recent years, the number of payday loans from 2006 to 2010 grew from 10 million to 12 million, with the number of customers increasing from 1.4 million to 1.6 million. In 2010, $3.1 billion in payday loans were issued in California. Frustrated with the lack of action at the state level, many local communities are now trying to tackle the problem on their own. Although they cannot cap interest rates, cities and counties can change land-use and zoning laws to make it harder or impossible for payday loan businesses to set up shop.
Demand will continue
Greg Larsen, spokesman for the California Financial Service Providers Association, said that eliminating legal, state-regulated payday lending or making such loans harder to obtain will not decrease the need for short-term credit. “The demand will continue,” he said in an email, “with some consumers possibly forced to use easily available, unregulated, online, overseas lenders with much higher costs, greater risks and unknown collection practices.”
No new applicants
San Jose city leaders are so far considering something short of a total ban or cap. If the current proposal is recommended to the City Council on May 15, new applicants would not be allowed to move into low-income neighborhoods but could open elsewhere in the city. They would have to stay only 500 feet from other payday lending establishments, not the 1,000 feet or more required in other cities that have tried to rein in payday lending. And there would be no limits on their proximity to liquor stores, bars and “adult” businesses.
Restrictive terms
Some city leaders have indicated they want more restrictive terms. City Councilman Ash Kalra and Planning Commission Chairwoman Hope Cahan said they would consider a hard cap on the number of payday lenders or a moratorium on future businesses. Laurel Prevetti, San Jose’s assistant director for planning, building and code enforcement, described the ordinance her office drafted as unique, given that it would specifically protect low-income residents from having more new payday lending establishments in their neighborhoods.
Loan Store Ordered To Refund Consumers. Clear Message to Loan Industry
March 28th, 2012
Consumer Protection BC steps in and orders Canadian payday lender to comply
A 2010 investigation concluded that Cash Store Financial, a Canadian payday lender was charging customers more than the maximum legal amount of $23 per $100 on payday loans by charging additional fees to issue loans on cash cards. The payday lender was issued a Compliance Order in November 2010 to stop charging the unlawful fees and refund customers. Cash Store requested a reconsideration of the decision which was granted in early 2011. The reconsideration process is now complete and the key elements of the original decision have been confirmed.
No extra charge
“Payday loan consumers cannot be charged extra for cash cards, that is the law,” said Manjit Bains, Vice President of Corporate Relations, Consumer Protection BC. “This decision sends a clear message to the industry and to consumers that consumers must never have to pay more than $23 for every $100 borrowed.”
Penalty and Comply order
Cash Store has been ordered to comply with BC payday lending laws and refund consumers who have been overcharged since November 1, 2009. They have also been ordered to pay a $25,000 administrative penalty as well as costs incurred by Consumer Protection BC. Cash Store has satisfied Consumer Protection BC that it does not make payday loans contingent on the supply of cash cards by confirming that they are providing an option to consumers, in addition to cash cards, to receive their money in a timely manner. Cash Store has 90 days to reimburse consumers and 120 days to provide proof of reimbursement to Consumer Protection BC. Consumer Protection BC will continue to monitor the situation to ensure that the law is being followed and consumers are refunded. Updates can be found at www.paydayloanrightsbc.ca
A Quarter of Americans Have Turned To Payday Loans
November 12th, 2011
Research Shows that Online Payday Loans are One of the Fastest Growing Segments for Lenders
It’s all to do with emergencies: New tires for the car. An unexpected trip to the emergency room. An afterhours call to an electrician to fix a blown circuit in the house. These are just a few of many examples of what can and does happen in an average month to many people. For those who are living paycheck to paycheck, meaning a significant number of Americans, these situations are not only stressful, they can also figuratively break the bank.
Budget
Unbudgeted expenses use up money that was earmarked for groceries or other living expenses, and if payday is not in the immediate future, it can be pretty difficult to make it until the next paycheck comes in. Traditionally, people needing extra money would head to their local bank to ask about a loan, which would involve a lengthy and time-consuming application process. In the case with all lenders who handle payday loans, certain restrictions do apply: for example, applicants must be typically 18 years or older with a checking account, a phone number, and a steady income of usually at least $500 to $1,000 a month. For people who meet the qualifications, payday loans tend to go very smoothly. Compared to a traditional bank, a payday lender has no interest in why a borrower needs the money.
Collateral
A bank will often require collateral and the reasons for the loan. Even then a bank can decline a loan request. A payday lender isn’t as difficult to work with and won’t ask about a borrower’s reasons for needing a loan. For clients who would like to try for a payday loan, but are feeling unsure about the process, statistics have shown that they are in good company. As of 2009, a federal government study showed that about 25 percent of Americans had consulted a payday lender or similar service in the past year.
Warning: Payday Loan Lenders on the Increase
October 11th, 2011
Check before you apply for an Online Cash Advance
Numerous accounts of ‘freelance’ predatory payday loan lenders are circulating. There are also accounts of lenders who try to use bank account information they glean to scam people. Make sure you know all ins and outs of the different payday loan regulations and operations of lenders in your state. Reviews can help finding the trusted payday loan lenders – reviews by real people are usually of great help when it comes to choosing a service provider.
Fast approval
If you need cash in an emergency or to pay urgent bills, you don’t need to wait till tomorrow and run to a cash advance store in your neighborhood. A better and faster alternative is to apply online for an instant approval payday loan. And even if you have bad credit, you will be approved.
Online lenders
Online lenders are usually willing to lend more money than local payday loan stores. When consumers apply online for a loan they are normally dealing with larger finance companies that are better able to fund larger loan amounts than the average local payday loan office.
Compare
While most people consider it second nature to compare mortgage lenders and vehicle lenders, few people recognize the value of comparing cash advance lenders. Getting a cash advance loan is a life saver during emergencies. After completing a short online application, you can have up to $2,500 deposited into your checking account within 24 hours. However, before submitting an application, it would be wise to research and compare various lenders. Visit www.PaylessPaydayLoans.com for a list of top rated online lenders in your state.
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