Payday Loan Reform News – November 3


As OCC Steps Backward on Payday Lending Oversight, Banks Shouldn’t Follow
November 2, Morning Consult
Legalized loan sharking has various disguises: payday loans, car title loans, high-cost installment loans. Payday loans are usually made by a storefront on the corner or by a nonbank online lender, but until a 2013 federal intervention, a handful of banks were wading in these waters, too, calling their typically 300 percent interest payday loans “deposit advances.”


Valdez: Will Congress kill a rule to keep predatory loan sharks at bay?
October 31, AZ Central
America’s working-class heroes struggle to make ends meet. They tug on short dollars to cover expenses. When they need emergency cash, the corner-store lenders with the neon signs are more welcoming than the local bank.


Top News

Local Community Groups Rally To Tighten Payday Lending Interest Rates
November 2, WOSU Public Media
Several community groups rallied to show their support for a bipartisan bill they think is needed reform against predatory lending. The bill would cap the interest rate of payday lenders at 28 percent and close any loopholes around that cap. In spite of previous reforms, some of those loans have interest rates approaching 600 percent.


Society sets forum on predatory lending
November 2, Chillicothe Gazette
When the St. Vincent de Paul Society in Columbus created a microloan program, the intent was to provide an option for those in need to meet smaller, unexpected expenses without falling prey to predatory lending practices.


How a Main Line payday lender used an Indian tribe and an empty computer server to make millions
November 2, The Philadelphia Inquirer
Payday lending pioneer Charles Hallinan illegally bilked millions from borrowers, according to prosecutors.


Following The Money From High-Interest Lenders To Lawmakers
November 1, NPR
Candidates for governor and state legislature in Virginia are getting big donations from predatory lenders ahead of this month’s vote.


Editorial: Abusive short-term lenders deserve the tighter rules they’re getting.
November 1, Death Rattle Sports
Trapping consumers in an unending cycle of debt is hardly an accidental byproduct of the payday lending industry. In many ways it’s the intent. Burying borrowers beneath mountains of recurring debt is one of the main ways the $3.6 billion industry stays afloat.


Payday Lenders Continue to Prey on NYC’s Poorest Residents
November 1, Jewish Voice
In a disturbing new sign of economic distress, payday loan sharks are back to prey on New York’s poorest neighborhoods. Payday lenders, check cashiers, number racketeers, and newly prestamistas (Spanish for lender) are dragging vulnerable consumers into a vicious cycle of unsustainable debt. This is a multimillion-dollar underground banking business where customers with shaky credit get short-term cash at sky-high interest rates, often securing the loan against the borrower’s upcoming paycheck.


Illinois Sues Payday Lender Over Worker Non-Compete Rules
October 31,
The Illinois attorney general’s office is suing the owner of a chain of payday lending stores for allegedly forcing low-wage employees to sign non-compete agreements. The lawsuit, filed in Cook County Circuit Court, contends Check Into Cash effectively prevents employees from getting another job in Illinois as anything from a bank teller to a retail cashier for one year after leaving.
Reposts: WJBD Radio, Tribune Star, WRCBTV,, QC Online


Don’t bank on a return of this payday loan alternative
October 31, Bankrate
Deposit advances once were offered by banks like Wells Fargo and Fifth Third Bank. Like payday loans, they covered folks who needed quick cash in emergency situations and charged high interest rates in return. When strict guidelines made deposit advance loans virtually impossible to sell, banks dropped them in 2014.


Predatory ‘payday’ lenders are overdue for regulation
October 30, San Luiso Bispo Tribune
The Tribune article said a bureau of the federal government has “finalized” some new rules to reduce the “payday” lenders’ outrageous charges. I put quotation marks on “finalized” because the new rules really won’t take effect for awhile and will be opposed in Congress by the “payday” lenders’ friends.


Faith Leaders Call for Cap on Payday Lending Rates
October 30, Tampa Bay Reporter
Faith leaders and impacted community members gathered in front of a payday lending storefront Sunday (Oct. 29) to join together for a Prayer Walk to call on the Florida Constitution Revision Commission to sponsor a proposal that would put a rate cap on predatory payday lending on the ballot.


Central Springfield, a pocket of blue within a sea of dark red
October 30, Missourinet
The city manager and city council, along with faith and business leaders, identified payday lenders as a leading contributor to poverty last year. They determined that the high interest, short term loans the lenders offered tend to lead customers into a cycle of debt.


Payday Loan Volume in California Dropped 11% after the States Early Medicaid Expansion in 2012
October 29,
After California implemented its early Medicaid expansion in certain counties in 2012, the number of payday loans taken out each month declined by 11% compared to loan volume in counties nationwide that did not expand Medicaid. The number of unique borrows declined in the early expansion counties. The amount of payday loan debt also declined.


There are Alternatives to Payday Loans and Other Predatory Lending
October 28, Wisconsin State Journal
One reasonable alternative is a payday alternative loan (PAL) available through federally chartered National Credit Union Association (NCUA) members. Such loans can be between $200 and $1,000. To qualify, a borrower must be a member of the credit union for at least one month.


Debt Trap: Feds Move to Tighten Rules on Payday Loans
October 27, The Oakland Press
The six-year-old Consumer Financial Protection Bureau oversees lending nationally for the U.S. government. For the first time, it’s proposing a national rule that would require lenders to verify that borrowers can afford the loans, allow for no more than three loans at a time, and limit the number of times lenders can try to debit borrowers’ bank accounts.
Reposts: Matacomb Daily, Daily Tribune


Illinois sues payday lender Check Into Cash over worker non-compete rules
October 27, WRCB
The Illinois attorney general’s office is suing the owner of a chain of payday lending stores for allegedly forcing low-wage employees to sign non-compete agreements.


Illinois sues payday lender over low-wage workers forced to sign noncompete agreements
October 27, Chicago Tribune
The Illinois attorney general’s office is suing Check Into Cash, a national chain of payday lending stores, for allegedly forcing low-wage employees to sign noncompete agreements in violation of state law. The lawsuit, filed Wednesday in Cook County Circuit Court, said Check Into Cash effectively prevents employees from getting another job in Illinois as anything from a bank teller to a retail cashier for one year after leaving.


New Rule Protecting Payday Loan Consumers
October 27, Huffpost
Where do lower-income Americans turn when faced with immediate bills and no money with which to pay them? Most turn to the payday loan industry, which offers short-term loans in exchange for fees and high interest rates. These loans are generally $500 or less and are called “payday” loans because the borrower is expected to pay it back upon receipt of their next paycheck.