By Antonio D. French
Filed Tuesday, September 18, 2007 at 7:25 AM
Attorney General and gubernatorial candidate Jay Nixon will be in north St. Louis this morning calling for stronger legislation against the payday loan industry.
Nixon says Missouri has some of the most lenient payday loan laws in the nation. Because of Missouri’s lax laws, some loan recipients could end up being charged as much as 1,950% APR (with an average of 422%). According to the most recent report by the Division of Finance, nearly 3 million payday loans were issued last year and the number of new loan licenses issued to lenders has increased by 69% since 2003.
The result of these lenient laws: Missourian families paid $317 million in fees and interest in 2005 alone, second in actual dollars only to the state of California.
Nixon's press conference will be held in vacant lot directly across the street from Payday Loan Center, 1315 N. Kingshighway, at 10:30 AM.
Check back later for video.
15 Comments:
Do payday loan services actually help a community?
9/18/2007 7:53 AM
Oh yeah, payday loan services help the community a great deal with their interest rates around a whopping %300. They help the community stay in debt and they need to be controlled. Payday loans and Title loans are out of control. They are the modern day loan sharks.
Someone needs to stand up for the common man in society, especially in these hard economic times.
9/18/2007 10:09 AM
Wow, who knew Jay Nixon understood the damage caused by payday loans?
I am very pleasently surprised.
Now let's get rid of the payday loan places and get local banks to reopen branches in needed neighborhoods. Let's get these banks to structure helpful loans that working people can use and then repay. It has worked in other cities why not here.
Nice job Jay. (You still have a bunch of other stuff you need to do before I would vote for you though.)
Better than Blunt but not by much.
9/18/2007 10:20 AM
A waste of time knowing down a straw man. Most consumers use these loans as less expensive alternatives to NSF check fees and late charges charged by credit card companies. The Federal Reserve recognizes the value of these loans and says they are not "predatory".
The Common Man knows that this is a cheaper alternative. If there is a viable way to provide these financial services at a lower cost, then go into business and wipe out the payday loan companies through competition.
You should also exlore who funds the consumer groups attacking these loans: Rockefeller Foundation and Chase-Morgan. What's their financial interest? Fees.
9/18/2007 10:29 AM
Payday loans help those that are in a financial pinch and have no other means of borrowing money. Banks do not offer a $200 loan until payday. Its designed for short term use. The interest charged on $200 is $36.00 for two weeks......not bad in my opinion.
9/18/2007 10:53 AM
I use payday loan services a couple times a year. The alternative is bouncing a check and paying obscene fees by the so called "community banks." Do the math before you start preaching to me about the "loan sharks." I'd rather borrow $200. and pay $35. interest than bounce 2 checks checks and pay $100. in fees. But wait, I guess it's better for me to pay the fees, because there's no APR, because they're charged by a "legitimate" bank and nobody ever bothers to compute what the "APR" is on the fees, if the fees were considered interest. The politicians aren't do us "the little guys" any favors, but doing the banks and other interest groups a good deed for more donations. It makes good press and I suppose most are stupid enough to buy into their B.S. If you want to help,go into business, undercut the payday lenders and I'll use your services, otherwise keep quiet.
9/18/2007 11:40 AM
Where does someone without a bank account cash their pay check?
My guess is payday loan store.
What type of fee is charged for this service?
9/18/2007 12:00 PM
Ah, Nixon on the cutting edge against the payday loan industry. Right behind Jim Talent, who targeted it on a federal level. Talent didn't get much political mileage out of it, and neither will Nixon.
9/18/2007 1:18 PM
Actually with late fees, penalties, interest and other miscellaneous fees the rates have been calculated at over 1900%
9/18/2007 1:49 PM
They charge 1% to 3% to cash a check (depending on the type) vs. the bank holding your money for 10 days until they allow access to it.
OK, smarty, what's the APR, if it were interest on a $50. bounced check with a $35. fee for ONE DAY, annualized? Answer - A heck of a lot more than a payday loan!
9/18/2007 2:34 PM
everyone who is complaining needs to contact the bank of credit union and see what it cost for them to overdraw your account or if your check is returned. take that number plus 25.00 which is the average fee charged at any retail store. And that means any check you write even a 10.00 dollar check could end up costing you up to 60.00 if your check isn't honored by your bank. while you are researching look at credit unions there financials are public record and you will see that these banks and credit unions make the majority of there fees on returned checks. payday loans aren't the bad guys minimum wage at 6.50 is, and health care, and higher prices for gas and milk might also be the problem. To many family's have fell through the cracks and payday loans help these individuals get the medicines they need and fomula they children need
9/18/2007 5:36 PM
Educate yourselves before blindly
believing the politicians. Why do so many people use these loans? Answer, because it is far cheaper than late fees on credit cards and nsf fees. APR stands for annual percentage rate. In other words, for a year!!! These loans are for two weeks or your next payday. A $20.00 late payment on a credit card is charged $39.00 for one day late!!!. Please do the math people.
The banks have created this industry by not making small loans and high fees. The rates are not regulated. Any one can open an office and charge a lesser fee. If you think the rates are to high then open your own office at a lessor rate. That is called a free market and that is what we need to keep. Lookout on fees by the banks if the customer has no other alternative!!!
9/19/2007 10:22 AM
There is one company that drives its competition nuts with its low prices, yet no one wanted it to be a bank.
Yes, the evil Wal-Mart wanted to open a bank, but no one wanted them to.
I believe Wal-Mart would have wrung the high fees out of the market, just like they have wrung the high cost out of a lot things. The government pretty much put an end to that.
I don't know that Wal-Mart would have been the best thing since sliced bread, but if you limit competition, you often end up with higher prices/less service.
I also find the $317 mil figure a bit unbelievable. That is over $50 for every man, woman and child in the state. I also wonder how much is return check fees have been paid vs. other states.
9/19/2007 2:02 PM
At the corner of Grand and Dr. Martin Luther King Eminent Domain was used to open an instance tax service. The theft of property in the city is the root cause of the destruction on the north side. Thanks to the distress community act, all low income communities in Missouri can not go on the path we have taken in the city.
9/20/2007 5:05 AM
thats "can now go on the path the city has taken"
9/20/2007 5:06 AM
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