Capain Mark Patton, commanding officer of Naval Base Point Loma, has a major problem with the recent influx of military payday loan lenders.

"This is a relatively new problem, relative being within the last five years," he said. "These businesses are multiplying because they are making tremendous profits off of our sailors. It's estimated last year that payday loans took $80 million out of the pockets of our active duty sailors and their families. That is unacceptable."

Pattone gave examples of harmful payday loan data in his testimony on predatory lending in front of the California State Senate Joint Assembly.

"A service member saddled with debt, fear, and considerable stress could suddenly find his integrity compromised," Patton told the assembly. "His job performance will probably suffer, and he most likely will lose his security clearance and be temporarily removed from his assignment. Between 2000 and 2005, revoked or denied security clearances for sailors and marines due to financial problems have increased 1,600 percent."

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The debate over payday loans is not only remaining strong in Canada - it's being taken to the Manitoba legislature. On Thursday,the public weighed in on the government's proposal to regulate companies offering cash loans and cash advances.

Members of the public were free to share their opinions on the proposed Consumer Protection Amendment Act with the government's standing committee on social and economic development. The proposed law, introduced in the legislature in March, would require payday loan companies to be licensed and bonded.

Potential customers would then be warned about the high cost of the payday loan have the right to cancel a loan without penalty after 48 hours.

The legislation proposes the provincial Public Utilities Board control the fees these faxless payday loan companies are allowed to charge. Additional fees would not be allowed when payday loans are renewed, extended or replaced by a new payday advance unless these additional fees are authorized by the PUB.

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In covering this ever-changing industry, the Payday Loan Times comes across a wide variety of short-term lending organizations and news regarding them. In trying to appeal to prospective clients, a payday loan company will often tout its faxless loan system, along with the general speed and convenience of its service.

That, in itself, is not surprising.

The nature of payday loans is that they are fast and make the consumer go through fewer steps than conventional loans. But what piques our curiosity lately is the efforts of payday lenders to market their supposedly low-cost, or cheap payday loans. Can such a thing even exist, or is this solely a hook to lure unsuspecting, desperate customers?

In our opinion, it's all in the interpretation.

It all depends. Take a step back and examine your situation. While it might be hard, literally, to see how a cheap payday loan is even possible, given the interest rates involved with most transactions, it is very possible that given the particular circumstances a person is dealing with coming in, well, a payday cash advance might easily qualify as cheap by comparison.

Think about it. If you're in the position where you might get the power turned off in your house or apartment, the cost of NOT applying for a payday loan could be far greater. Plenty of utility companies, having monopolies in their particular geographic region, will charge egregious fees just to turn your power back on after it's been disconnected. That's after you pay the money you owe for past bills. So you are looking at possibly several hundred in fees.

That's just one example. There are many more, and each is likely to make the $75-100 fees associated with payday loans (assuming you borrow $500) appear tame. Let's say you need to get a car repair done and quick, because you work 20 miles away from home and can't exactly catch the bus. If you were to lose your job, or even a day's wages, you could be facing far greater problems.

We could go on and on. But you get the idea. Regardless of the details, the concept in play is similar. The fact of the matter is that a low cost payday loan may or may not apply to you, depending on your situation. You are going to have to evaluate it on your own, because only you know precisely what your money problems are and what options are at your disposal.

But play it smart. Whatever you decide about payday loans, be cautious. Even if you have concluded that this is your best option, there are still things to consider no matter who your lender is. Before you close the deal for payday loans online or in person, be sure all your bases are covered, and that you have planned ahead. Responsibility will ultimately lie with you. Always remember…

1. Avoid predatory lending. Like any industry, there are reputable payday loan firms and ones that should be avoided at all costs. Learn the tricks to watch out for by following the link we have provided.
2. Pay the loan off on time. Avoiding rollovers is key to putting this matter behind you and moving on with life. If you extend your payday loan, you open yourself up to steeper rates and more headaches.

The Times has already reported on the topic of payday loans in Canada. As controversy has swirled over the use of such cash advances, other publications have weighed in on the topic. The latest is The Ottawa Citizen.

According to the paper, a Senate committee has called for more investigation into the payday loan industry, suggesting more regulation is needed.

"We believe that action is needed to ensure that consumers are not abused by (alternative financial services providers) or the fees that they charge," said the report of the Senate standing committee on banking, trade and commerce, which tabled its findings yesterday.

The report said the committee members view the growth of alternative financial services providers as "somewhat alarming, since we do not believe they are adequately regulated." Testimony was then heard from many sources on what the report referred to as "payday lending organizations," companies that make short-term payday loans that often appear to entail usurious interest rates.

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In a hotly-contested race for a seat in the Alabama State Senate, candidates are squaring off on a number of issues.

One such issue is payday loans and their regulation.

Randolph County Circuit Court Clerk Kim Benefield is attempting to unseat District 13 State Senator Gerald Dial, who has become an institution in the eastern part of the state. A major point of contention between the political novice and the 23-year veteran is a bill involving short-term, fast cash advance lending.

"[Dial] was the sponsor for the bill that allows a payday loan company to come into Alabama and charge up to 450 percent interest. That's wrong," said Benefield.

Dial shot back that his efforts to get the bill passed actually help curtail egregious payday advance loan sharking.

"It took the loan sharks off the street. It made them do two things: It made them register with the banking commission, and it put a limit that they could only charge 17.5 percent interest," Dial said.

Benefield said Dial also voted against a rural development center that would help people in the less-populated areas of the state, one that would "pool resources, and give rural Alabamians a resource center as far as bringing in ways to market their products."

Dial says he's doing everything he can to help his district.

"I have brought industry. The job market in my area is the best it's ever been. Mrs. Benefield has been in the courthouse too long to know what developing rural Alabama is all about," the Senator said.

Voters head to the polls Tuesday to vote.

Payday loans! Get your payday loans! In case simply announcing the presence of these resources isn't enough, Check 'n Go, has hired a new creative agency to take over its marketing operations. 

Freedman, Gibson & White said Wednesday it is now in charge of such efforts. It will represent this payday loan company in order to get the word out about its cash advances, debit card products and other financial services.

The marketing communications agency sent out a news release in which it stated its work on the account will include creating an integrated branding campaign for the Mason-based business.

Check 'n Go operates more than 1,300 payday loan locations, as well as an Internet site. Freedman, Gibson & White, headquartered in Cincinnati, is the Tri-State's fourth-largest advertising agency, ranked by number of employees, according to Courier research. 

 
One of the better-known payday loan companies in the business, ACE Cash Express, Inc., announced today that it entered into a merger agreement with an entity formed by JLL Partners Fund V, L.P.

The deal is pursuant to which JLL Partners, ACE's Chief Executive Officer and certain members of ACE's senior management team would acquire all of the outstanding shares of ACE's common stock and shareholders of ACE will receive $30.00 per share in cash.

After the completion of the merger, ACE's Jay B. Shipowitz will continue in his role as President and Chief Executive Officer of the payday loan online service.

The debate over payday loans in Canada is growing stronge. The most recent entry into the fray? New Brunswick minister of justice and consumer affairs, Bruce Fitch.

He's trying to arrange a meeting with the federal justice minister to discuss changes being proposed by Ottawa, and whether provincial legislation would be required on the issue of cash loans.

Opposition Finance critic, Mike Murphy, says he's concerned that people who use a payday loan company face an average of 107 percent interest after just 10 days. Murphy says he's getting e-mails from people who have been impacted by the high interest rates.

A federal committee, according to Fitch, has been studying payday loans and he's hoping for a meeting of provincial ministers this fall. He says no fax payday loan companies should still be able to operate, but not at the expense of consumers.

Eric Tobin, 31, felt ashamed during his first trip to a payday loan establishment.

In an interview with the Battle Creek Enquirer, he describes carrying a stack of personal documents (pay stubs, bank statements, copies of past utility bills) in a large envelope, parking in a neighboring lot and looking both ways upon entering and exiting the small office.

He was afraid someone would see him, and worried that patronizing such a place would make him appear desperate.

But he was.

Tobin recently lost his job as a senior analyst for a reputable financial services firm, and along with the job went benefits. Following an illness, the young Athens, Mich., man and his wife quickly found themselves unable to pay a pile of medical bills. Then, an overdue electric bill spurred a two-year financial free-fall.

"That was the last straw. I didn't want to further damage my credit by not paying my bills, so I went to a payday lender," Tobin said.

As of Thursday, Michigan's laws changed to better consumers from so-called "predatory" lenders. Increased payday loan competition has driven down fees and interest, but in November Michigan passed House Bill 4834, which caps payday advance loan fees, sets limits on individual loans and prohibits rollovers.

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We recently ran the majority of an editoral that criticized the possibility of payday loan companies returning to North Carolina. Looks like that critic wasn't alone. A recent piece in The Fayetteville Observer echoed these negative sentiments:

We won’t bother to ask what they were thinking. They weren’t. Nor were they caring.

It’s inconceivable that any legislator with a conscience could try to bring the scourge of payday loan lending back to North Carolina. But that’s exactly what a group of lawmakers is trying to do. What’s most remarkable about the effort is that many of the bill’s supporters represent the people who have been hurt the most by the usurious practices of payday advance lenders.

The practice of payday loans was finally banned from North Carolina after a battle that raged for years. Even though cash loan lending was made illegal on 2001, lenders found loopholes and continued to offer the loans — which often have triple-digit interest rates — until this year.

A bill filed by Mecklenburg Democratic Rep. Beverly Earle would allow North Carolina faxless payday loan lenders to issue “credit enhancement loans” to customers who are “financially underserved” and can’t qualify for conventional loans. The bill permits payday loans of up to $3,000 at initial interest rates of up to 50 percent.

Chris Kukla, director of legislative affairs for the N.C. Center for Responsible Lending, told an Observer reporter that the bill could permit the same sort of interest rates charged by fast payday loan lenders in the past.

“The APR could be well above 200, or even 500, 600 or 700, depending on how the loan is structured,” he said. “The way this bill is written, it opens itself up to manipulation.”

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