Payday Loan Times

Lansing, MI — After the Senate and House approved the Michigan payday loan bill, Governor Granholm signed the piece of the legislation. This new law regulates payday lending in Michigan.

The new law limits borrowers to a maximum $600 loan in a 31-day period, and lets lenders charge service fees between 11% and 15%.

The legislation also requires lenders to get a license from the state by June 1 and limits customers from taking out multiple payday advances at the same time.

Rehoboth Beach, DE — County Bank is ending its eight-year involvement in the industry of payday advances. Harold L. Slatcher, president of the Rehoboth Beach, Delaware-based bank, said Tuesday that the bank will end all partnerships with payday lenders by the end of next month.

"This is 100 percent our decision," said Slatcher, who helped found the bank in 1990. "At no time did the FDIC ask us to get out of this business, nor did we cave in to pressure from the activists."

County Bank was among the most significant players in the payday lending field. At its height, the company had partnerships with 20 no faxing payday loan companies, according to a North Carolina consumer activist group.

Lansing, MI — Michigan will soon join the list of states with consumer protection again payday loan lenders. Previously, Michigan was just one of fourteen states without any protection.

Things are going to change. The state house voted 98-6 to approve a bill that would regulate the payday loan industry.

House Bill 4834 would limit borrowers to a maximum $600 loan in a 31-day period and let lenders charge service fees between 11 percent and 15 percent.

Next up for the bill? It needs to go before the Senate and Gov Jennifer Grandholm must sign it.

Chattanooga, TN — The city council is looking into a way to control the rapid growth of payday advance loan shops, pawn shops, title pawn outlets and check cashing stores. Currently, these stores are lining Brainerd Road, Rossville Boulevard and Ringgold Road.

Greg Helms of the Regional Planning Agency told council members that many payday advance loan firms have moved into Chattanooga after being outlawed in Georgia.

The city feels that the stores are destroying property values due to their "garish colors" and "flashy signage."

As evidence, Mr Helms said from 2000-2004, property values went up 23 percent near the stores and 31 percent citywide.

So two of the things city officials are considering are setting distance limits between the quick payday advance stores and setting standards on how they blend into the neighborhood.