Protest Against Payday Loan Lenders Planned
By J.J. CameronPayday Loan Writer
The Witchita Eagle is reporting that citizens and consumer advocates in Kansas are not pleased with payday loans. As a result, Sunflower Community Action plans to protest Saturday against some payday loan lenders and their collection practices.
The group says too many Wichitans are becoming trapped by such faxless payday loans. It has also organized a June 10 community meeting concerning the issue.
J.J. Selmon, community organizer for the northeast chapter of the grassroots group, said he knows of people who are thousands of dollars in debt because of payday advances.
"It's not just a low-income problem. It's affecting people who have pretty good incomes. But it's the only place they could go to get a loan, and they're getting caught up in the fees," he said.
The problem with savings account payday loans, Sunflower and other consumer advocates say, is that people are going from one payday lender to another, finding themselves unable to ever get the loans paid off.
As of Thursday, Wichita had 64 licensed payday loan lenders, according to the state bank commissioner's office.
'A habitual situation'
Jeff Witherspoon, executive director of Consumer Credit Counseling Service in Wichita and Salina, said more and more clients at the nonprofit group are showing up with payday loan problems. When one loan becomes due, the consumer goes to another lender for another loan.The norm is two to four loans among clients with payday loans, Witherspoon said. But his group has seen clients with more than a dozen loans, including a teacher who had 18, he said
."It's a habitual situation," Witherspoon said. "We've definitely seen people with multiple loans."
But Whitney Damron, lobbyist for the Kansas Payday Loan Association, said payday advance lenders merely are filling a need.
"These sources of credit are ones that our customers have asked for," Damron said. "Our customers have been turned away by traditional lenders like banks and credit unions. Where do these people go to get loans?"
It's easy, Damron continued, for groups such as Sunflower to blame the lenders. But the lenders, he said, aren't forcing anyone to borrow money.
Dubious payday loan collections
Selmon said some of Sunflower's constituents have complained about collection practices. Payday loan lenders have shown up at customer's homes and jobs. In some cases, the lenders have left notices on the doors of customers' neighbors saying that they owe money.
"That certainly would not be anything that businesses that I have been associated with would do," Damron said.
Witherspoon said his group wishes lenders would allow customers to put cheap payday loan debts on debt management programs. In these cases, counselors would negotiate a payment plan with a client's creditors. The client then makes one monthly payment to Consumer Credit Counseling.
But payday lenders won't participate in such programs, Witherspoon said. "I would like to see them give people the opportunity to pay these debts off at a low rate," he said.
