Colorado Payday Loan Industry Proliferates
By Danielle MasonPayday Loan Writer
Todd Hills, owner of the Westminster-based Pawn One Inc., introduced payday lending to his Jumping Jack Cash pawn shops about a year ago. After opening one stand-alone payday loan shop, Jumping Jack Cash Payday Advance, Todd Hills has seen “many more opportunities” with the stand-alone shop. He plans on opening 10 more by the end of second quarter, 2006.
Why do Todd and so many other entrepreneurs see so much money in this industry? Payday lending has more than doubled in Colorado since 2000, thanks to factors such as convenience, increased exposure, a lack of other small-loan sources and — some say — large fees for bounced checks and late payments.
The number of Colorado locations that offer payday loans has nearly tripled in five years, from 186 in 2000 to 550 today, according to Laura Udis, first assistant attorney general for consumer credit in the Colorado Attorney General’s Office.
Why the trend? One factor is that traditional lenders no longer make loans of $500 or $1,000, Udis said. Another reason is that bounced-check fees are higher than payday lender fees, causing consumers to borrow rather than write bad checks, he said, and consumers like the “straightforward proposition” of a payday loan.
