Congress banned payday lending for military personnel back in 2006 by imposing a 36 percent interest-rate cap for them. Also another 15 states have either done the same or out right banned the loans. The reason why payday lending companies are against these interest rate caps is because it is the same to these lenders as banning the loans. Current payday loans charge over 400% interest rates on these loans which generally are repaid in one month. Gutierrez’s bill caps the annual interest rate for these payday loans to 391 percent, bans the lenders from allowing borrowers to repay the existing payday loan with another payday loan, and prevents payday lenders from suing borrowers or docking their wages to collect the debt.

However, many people do not believe that this will be enough. “We don’t believe that this is going to protect consumers. It would in fact condone the payday lending that can be extremely harmful to the people who can least afford it,” said Jean Ann Fox of the Consumer Federation of America.

To read more about the influence game: payday lenders thwart limits head on over to the Associated Press.

“Payday lenders contend that they provide access to credit for under served communities,” said Leslie Parrish, senior researcher at the Center for Responsible Lending. “What they are really providing is access to long-term debt traps which too often lead to extra overdraft fees, credit card delinquency, trouble paying bills including medical expenses, even bankruptcy.”

The report stated that on average the nearest payday lender is almost twice as close to the center of an African American or Latino neighborhood as a mostly white neighborhood. It also said that race and ethnicity play a far less prominent role in the location of all other banks and financial institutions.

“Payday loans are a debt trap — and in California, that trap ensnares more African Americans and Latinos by a staggering margin,” said Ginna Green, spokeswoman for the Center for Responsible Lending’s California office. “The only solution that springs the trap is a comprehensive, small-loan rate cap that covers all small-dollar loans. California’s payday lenders don’t deserve to be above the laws that regulate their competition.”

To read more about payday lending debt trap strips annually $247 million from California’s African-Americans and Latinos head on over to The PR Newswire.

Sandpoint Republican Senator Shawn Keough argues that the law should cover internet payday lenders and give the state the ability to prosecute those who violate this law. The bill does however void any loan provided by an unlicensed payday lender and gives the state the ability to issue cease and desist orders and sue unlicensed payday lenders.

To read more about Senate passes payday loan restriction bill head on over to Fox 12 News.

The new bill will cap the total number of payday loans a person can take out during any calendar year to eight. It will also caps borrowers to a max loan of the lower of 30% of their monthly income or $700. Next the bill forces payday lenders to give borrowers a payment plan with no additional fees for 90 days on debts up to $400 and 180 days for anything above that. Lastly the bill establishes a statewide database that will track all existing payday loans a borrower has taken out.

To read more about key to payday bills? make sure both sides hate it, head on over to the Seattle Weekly.

Cyrus Haden, head of the marketing department at Payday Loans without Credit Check says, “Availability of Payday loans no credit check is an effort made by us to facilitate individuals fill in the financial gaps effectively. We understand that urgent financial requirements may arise before your payday, and these specific needs to be addressed soon. But the long wait of credit check and other formalities that encompass the loans procurement could defeat the purpose of applying for additional finances. Our payday loans services are aimed to help you evade financial stumbles without the hassle of credit check.”

To read more about payday loans for unemployed - payday loans without credit check head on over to TMCnews.

South Carolina is one of 35 states that allows any form of payday or cash advance loans. Some states have cracked down on payday loans in recent years, often by putting caps on interest rates, usually at 36 percent or less. The industry has been practically outlawed in neighboring Georgia and North Carolina. In Pennsylvania and Arkansas, such caps led Advance America Cash Advance Centers Inc. to close some stores there in 2007 and 2008.

In South Carolina, lenders charge $15 for every $100 borrowed on a two-week loan. The bill requires the industry to let customers go into an extended payment plan if they can’t meet that deadline, without incurring any extra fees. The bill requires another perfunctory vote in the House before heading to the Senate. That chamber approved industry restrictions last year in a bill that died in the House.

Critics said the bill did not go far enough in stopping the industry from preying on the poor. But supporters argued people sometimes need a temporary infusion of cash, and putting the industry out of business would only drive them to loan sharks and online, unregulated lenders. “I believe we’ve done the best we can,” said Rep. David Mack. The real-time database means “literally, a person cannot go into one payday loan entity, walk across the street after getting one and get another. That’s been the main problem - multiple loans.”

To read more about SC lawmakers approve payday lending regulation head on over to Forbes.

“This industry thrives on the victimization of vulnerable repeat customers,” Wilson told the House Business and Labor Committee. “The rates these lenders charge is unconscionable and amounts to nothing more than legalized loan sharking.”

Supporters of the bill claim that 18 state have already capped the interest rates on payday loans at 36% & that the federal government has placed the same cap on any payday loan given to military personnel.

To read more about payday loans under fire at Mont. legislature head on over to Forbes.

When compared to payday loans, which sometimes hold interest rates over 300 percent, pawn loans are less expensive  and do not need to be repaid if the borrower forfeits the collateral. 

“The pawn transaction is a very simple, no-questions-asked secured loan that’s working very well for people,” Sterne Agee analyst Henry Coffey said. According to Coffery these companies are pouring capital and managerial resources into their pawn products, which are growing at a rate that hasn’t been see in the past 10 years. 

States like Ohio have cracked down on payday lenders putting a cap on their interest rates of 28%. Because of this companies like Cash America, who closed 42 stores in Ohio, have been suffering. Payday loan companies argue that while 28% may sound like a lot of money, most of these loans are paid off in two weeks. If someone were to borrow $500 and pay it back in two weeks the payday loan company would only make $5.38. Payday lenders say this isn’t enough money for them to make to pay their bills, or even cover the amount of loans that end up going into collections due to the higher risk. 

The payday lending sector is also expected to face resistance from President Barack Obama, who during his campaign called for interest rate caps and improved disclosure. 

Companies like First Cash said that they now expect that 75 percent to 80 percent of its earnings for 2009 to come from pawn operations. Many of these companies have also expanded their operations to Mexico where the demand for such loans is high. 

First Cash expects to open 55 to 60 new stores in Mexico and a limited number of new pawn stores in the United States this year, while Ezcorp plans to open 30 to 35 pawn shops in Mexico.

Cash America said in September it planned to buy an 80 percent ownership stake in 100 pawnshops in Mexico for about $90 million.

To read more about pawn shops cashing in head on over to Reuters.

Payday loans are a type of short term loan that allows people to borrow money until the following payday, typically within two weeks. All that you need to qualify for one of these payday loans is proof of employment, and a post-dated check payable to the payday lender for the amount plus their fee. The maximum amount the borrower can get varies from state to state; in Indiana, the maximum per loan is $550, with an annual percentage rate of 349.36 percent. The lower the loan, the higher the APR. If the $550 loan is repaid on time, the fee is roughly $74. People can get trapped in when they can not repay the loan and have to renew it multiple times, each time having to pay the fee. The maximum amount of times the payday loan can be renewed in Indiana is six times. Which means if someone borrowed $550 and renewed it each time they’d end up having to pay $993.41 by the end.  

Payday loan companies say that they provide a much needed service to people without good credit or who need short-term credit. However many ward that once people start getting into the habit of taking out payday loans they end up in a cycle that eats up their paychecks with annual interest rates of nearly 400%. 

More middle-class families are using payday loans “to put off the day of reckoning,” said Elizabeth Warren, a Harvard law professor who is chairwoman of a congressional watchdog panel on the $700 billion bailout for the U.S. financial system. ”Too many families live with no cushion, so when something goes wrong, they turn to payday lenders.”

To read more about as economic uncertainty mounts, more middle-class families are learning that payday loans add up head on over to Indystar.

These open-ended loans allow payday lenders to charge any interest rate or fees that they would like as long as there are none in the first 25 days of the loan. The payday lenders’ willingness to offer these unregulated open-ended loans has lost them many of their former supporters. It was Senate Majority Leader Richard Saslaw, was one of the industry’s biggest supporters, bill that passed the chamber unanimously. After the bill passed Saslaw said ”I don’t believe in sending messages,” and ”I corrected a problem, and we’re not finished yet.”

Jamie Fulmer, a spokesman for Advance America, the nation’s largest payday lender, stated that ”It was never the industry’s intent to circumvent last year’s payday loan reforms by offering this line of credit product.” ”We saw an unmet need for access to modest, unsecured loans.”

Now the bill has to go to the Republican-controlled house, where its chances of passage are uncertain. Although Saslaw hopes to try and restrict payday lenders even further when the bill gets there. 

To read more about Virginia Senate says no to payday lenders head on over to The Washington Post.