J. J. Selmon of Sunflower Community Action, estimated that 250 people were in attendance. Those attending held signs such as:
- "I have a dream"
- "Payday Loans suck"
- "Payday Loans will ruin your life"
- Payday Loans = Legalized Loan Sharks"
The Proposed Bills
The bills would not regulate so called refund anticipation loans, according to Rep. McCray-Miller, but would directly regulate payday loans, car-title loans and pawn shops.
One (H.B. 2244) would cap interest rates on short-term, auto-title loans. The terms
of these loans are simple and stunning. If you miss one payment, you can lose your car title. Defaulting on a loan as small as $300 can bring a family to a halt.
The other bill (H. B. 2245) would limit the number of payday loans a person could have to two.
Today, the average is six. The law would require payday loan companies to check a database to see how many loans someone had before they offered another.
The event did not go without criticism, from the loan sharks, in the Payday Loan Industry.
Mike Strong, owner of Mike's TV Furniture and Appliance in Hutchinson, which offers payday loans, said people who are critical of payday loans have never needed to borrow $100 or $300.
"The people who are wanting to change regulations have never had to get a payday loan," Strong said.
The perception of his industry, he said, is that "we're not reputable. But when I talk to customers, they basically think we're a godsend."
Really Mike? Is that so? Guess again. A good number of the people who are calling for the regulations, have been caught in your industries snares and know 1ST hand that you are in fact not all that reputable.
However, I still believe that you have a right to do business. In fact the way you do business, Mike, is better then many of these sharks. You sir, are at least diversified with your TV, furniture and appliance sales. Some of these other bozo's out there have all their eggs in one basket, that of predatory lending.
All I am asking for, is protection for the consumers by limiting interest rates to 36 percent annually that you charge.
As for the customers who think you are a godsend. Why don't we ask your former customers, that have wised up (like Mitzi Rivers)? That would be the true test of how reputable you are.
Mitzi Rivers
In May, Sunflower invited Kansas’ Deputy Bank Commissioner to lead a workshop on payday/car title lending. It was attended by 40 consumers, bank officials, and two state legislators. After the workshop, the legislators and Sunflower leaders laid plans to introduce a bill that will protect consumers.
Seeing Sunflower as a threat to his loan shops, Kenneth Wayco rented 8 buses and 350 people to attend Sunflower’s June 10 meeting for $100 cash, a t-shirt, and a meal. When he saw that he could not take control of the meeting and that his “supporters” were learning too much, Wayco asked them to leave.
In addition to positive media reports about the meeting, “supporter” Mitzi Rivers gave back her $100 and vowed to pay off her seven payday loans. She was paying $330 in fees every two weeks on less than $3,000, with no end in sight. Sunflower introduced Mitizi to a credit union that helped her pay off the predatory loans.
Thousands of hard-working Kansans find themselves in Mitzi’s situation. Sunflower will continue to educate the public, refer people stuck with bad loans, and work with legislators who are writing a bill to curb car title and payday loan shop abuses.
We must protect the consumers. I am not saying drive the Payday loan places out of business, but they need to be competitive with other banks. 300-700 APY is way to much. I support the bill proposed by Rep. McCray-Miller. The payday loan and car title places (you can get a car title loan at your bank to) need to offer more services other then the high interest predatory lending. They must be more competitive with the banks and stop preying on the poor (and our brave men and women in the military).
A vote against these bills is a vote against the consumer.
I wholeheartedly agree. That's funny that you mention predatory lending, I just wrote a bit about Refund Anticipation Loans (RALs), which is what a lot of tax firms are doing with their clients. It's a total ripoff and it is so unfair to the people who are hit hardest by this. A lot of times the consumer of this type of loan really isn't aware of the steep APR that accompanies it.
ReplyDeletePeople are always arguing that it's a free market and why stick the government's hand where it doesn't belong, well...someone has to watch out for those who would otherwise be taken advantage of. If I had it my way, I would probably find a way to get rid of this altogether...but I guess that a 36% cap is a decent compromise.
Nice blog btw...thanks for the tips. I'm trying to work my way out of 15K plus of unsecured debt, I hope to be out by March of 2008. Wish me luck!
I tend to agree with you on most things POT, but I can't agree on this one. No, I don't have a payday loan business. Yes, I do believe they are predatory. Still, I don't like the caps the legislatures want to impose. These payday loan companies take enormous risks by lending high-risk people money. People that no bank would lend money at any interest rate. Sure, one can get a title loan from a bank, but not if they don't make a good income and already have good credit. The government, no matter how hard they try, cannot, simply cannot eradicate bad decision by legislation. It's as if everyone is saying the people who are caught in the pay day loan cycle ar not responsible for being there in the first place. People have to assume responsibility for their actions, and the consequences that go along with those actions. This kind of legislation hurts our society in the end run by removing any personal consequences from bad decisions.
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