Tyrone Mitchell waited patiently in line for his turn to approach the counter at Pioneer Jewelry-Music-Pawn in Wilson, N.C.

One hand rested on the bright blue, 18-speed, Index Power Climber mountain bicycle he'd rolled in the door moments earlier. Mitchell needed money to buy gas so he could get from Wilson to his job in Raleigh.

He hoped to get at least a $40 loan for his bicycle.

With money in short supply and payday still days away, Mitchell felt he had no option but to pawn his bicycle. And he isn't alone in his need for a quick cash fix. More than 1,200 times a month last year, people sought money by selling their items directly to Pioneer owner Phillip Jordan or by pawning their items.

Thousands more applied for payday loans.

Jordan said people often pawn items to get gas or lunch money because it's easier than borrowing money from a relative or friend. Pawning costs people more money because of the accumulating interest.

(more…)

If you specialize in providing payday loans in Illinois, you have two choices when faced with new regulations:

1. Cry and complain
2. Adjust your lending strategies

In Kane County, it's become increasingly difficult to earn a living since Illinois legislators passed a law placing limits on short-term cash loans in 2005.

But if you ask Rhona Benau, district manager of All American Cash Advance in Elgin, there are prosperous, helpful alternatives. She's resorted to giving out six-month loans instead of the savings account payday loans that required payment with interest within days.

"We had no choice, we were told to stop doing it," Benau said. "But it really is better for the customer."

In the past, critics blamed payday loan services for taking advantage of customers by granting them loans with high interest rates. Although some providers of the no fax payday loans said politicians have unfairly targeted their industry, lenders such as Benau said they were indifferent to the change because their businesses hadn't suffered setbacks.

The law includes a fee cap to reduce the cost of using payday loans, an industrywide cap on borrowing, a recovery period to break the cycle of debt, a repayment plan to help borrowers in increasing debt, and a statewide consumer reporting service for enforcement.

(more…)

In an effort to avoid situations where customers cannot pay back an instant payday loan on time, and to increase profits through efficient lending, Cash Now has integrated the Cash Now Loan Verify feature into its business.

This advancement will allow the payday loan company to integrate its technologies with other payday loan, sub prime credit reporting agencies and identify potential bad loans, while reducing loss exposures for the Cash Now licensees utilizing the company technology.

The integrated Loan Verify has one of the most extensive databases in the market today. Whis is this advantageous?

Because the more accounts tracked, the more likely it will be to accurately evaluate the customer in the check-out line. The Loan Verify negative database (accounts with returned checks) includes more than 22 million accounts.

With more than 120,000 merchants and 260 collection agencies contributing to the database more than 300 times per day, the Loan Verify continually expands its up-to-date information, expediting faxless payday loan customer service and reducing check losses.

"We are very excited about this feature and the capabilities" said Kevin Price the Cash Now CEO.

The low cost payday loan business is booming, Mr. Price continued, as the number of outlets now offering the sub prime low-dollar, super-quick loans has doubled to over 20,000 in the last four years. Industry growth from predominantly stand-alone check cashing storefronts, has been fueled largely by the Internet and savvy, new marketing techniques.

Behind the success of many of the new breed of payday loan lenders is the Florida-based payday loan lead generation and software system licensed by Cash Now Corp.

Payday loan companies are quickly realizing that the marketing solutions offered by Cash Now to generate new borrowers for their cash advance products are more cost effective and productive than using their own systems.

Just last year, Delegate Glenn Oder was considered an enemy of payday loans in Virginia. However, after striking down his own proposal to regulate cash loans in the state last year, Oder is now receiving criticism for a new bill he recently sent in for the 2007 General Assembly session that will put new restrictions on the payday lending.

The Daily Press reports that the 2007 version is weaker than the original and has drawn some opposition from instant payday loan opponents.

Oder is one of many Virginia legislators who want to slap restrictions on the booming payday advance industry. The evolution of his attempts to regulate the high-interest loans shows how the industry has used its growing political might to fend off its opponents, though.

"I would prefer that we didn't have payday lending in Virginia, but I don't know how we could eliminate it," said Oder. "My goal is to do what I believe is politically possible in Virginia."

Many consumers don't like that sort of concession. Virginia now has more than 750 lenders, which made almost $1.2 billion worth of regular and no fax payday loans to 446,000 consumers in the state in 2005. It's a growing issue of debate and conflict.

These companies, along with their supporters in the General Assembly, argue that the personal loans fill a short-term need for cash that banks won't provide. They say the loan interest is better for a consumer than losing utility services or bouncing checks.

One of the key compromises between industry and legislators who legalized payday loan lending in 2002 is that individuals can't extend a loan they can't afford to pay off. By paying more fees and interest, these so-called rollovers compound interest on the payday cash loan.

"But of course, they allow back-to-back loans, which is the same thing," said Jean Ann Fox, a York resident who is director of consumer protection at the Consumer Federation of America.

(more…)

Vellis Salway is a resident of Keizer, Oregon. She recently penned a letter to The Keizer Times, questioning the political motivations behind last week's payday loan ordinance vote.

It's paraphrased below …

It's time to set the record straight on Keizer City councilor Chuck Lee's alleged ordinance on faxless payday loans. Two weeks ago, The Keizer Times reported the council would hold a public hearing Aug. 7 on a payday loan ordinance proposed by Lee. There was no hearing, and when Lee asked to have an ordinance written, he was voted down 5-2.

Clearly this was nothing more than a political ploy on Lee's part to gain some brownie points for his legislative campaign. Lee is in the minority on this issue. A majority of his fellow council members were wise to wait until the new state law adopted by the Legislature regarding payday advances is implemented.

I'm wondering if we even need to lower the hammer on these instant payday loan companies. It seems like a lot of people need these loans, so why should government regulate these companies out of business?

Having garnered plenty of support, a military payday loan report has made its way all the way to Congress this week.

The Defense Department study sent shows that Congress must stop predatory, no fax payday loan lenders from preying on our soldiers, sailors and aviators, said President Michael Calhoun of the nonprofit Center for Responsible.

The Pentagon paper says payday advance lenders should charge no more than 36 percent annual percentage rates on their loans to service members, the same cap many states impose in their usury laws in order to ban payday loan sharking. Senator Jim Talent was mainly responsible for moving on this issue.

"I applaud the Defense Department's report," Mr. Calhoun said. "Military families need protection from these predators. We must protect the people who protect us."

Congress asked the Department of Defense to investigate these faxless payday loan lenders and how they gouge our service people and hurt the country's preparedness for war.

(more…)

As the levels of consumer debt rise in America, it's apparent individuals need assistance. Sometimes, payday loans are the answer - as long as you understand how their interest rates work.

Over at MSN.com, however, a column talks about steps toward total financial control. We've paraphrased it below. Take the advice of this expert, take out a faxless payday loan … but just do SOMEthing about those rising bills!

Cut Up Your Credit Card Bills: The First Law of Money Dynamics states that if you have plastic you will use plastic. Therefore, you'd be well-advised to stop carrying anything but a debit card and leaving the credit cards at home.

Get real: People seem to believe their money problems will be solved by someone or something else, somewhere down the line. So let's get one thing straight: You're not going to win the lottery or marry the Sultan of Brunei. That's why applying for an instant payday loan is at least some sort of move in an active direction.

Get over it: Start a spending plan. Budgets can be tricky, so for 2006 implement the simpler 60% Solution. This entails keeping your committed expenses to 60% of your gross income. It's challenging, but worth it in the end.

Set up separate accounts for saving: You can actually set up TWO extra savings accounts: one for short-term, one for long-term. It doesn't cost a dime to do so. This is where the idea of a savings account payday loan came from.

Make saving automatic: Pick up the phone and arrange for automatic transfer forms to be express-mailed to your home or office. This way, 10% is transferred to your new short-term savings account with every single paycheck. If you can't manage 10%, start with 5% and build up to it.

The idea of all these steps is to offer an alternative to online payday loans that helps you lower balances. Good luck!

NOTE: Below is a letter we received, via e-mail, from a New Mexico resident with strong opinions about payday loans. If you would like to have your opinions heard, please use the Contact Us form and fire away. As a democratic and impartial site, Payday Loan Times wants to hear what everyone thinks, and present all views.

~~~~~~~~~~~~~

Hello. I just read about the editorial you have posted on this website regarding the new proposed state laws regarding payday loans. There was a statement to some effect that "they vote with their feet everyday."

Well no offense to any opinions or comments from people, and I hope this to be a liberal website where you can post any message and be heard, but simply I do not believe that comment for what it is worth.

I have recieved multiple payday loans to only find myself in a nightmare situation.

I just walked into a Ready Money location and the gentlemen [sic] explained, "yeah you look like the type that will pay us back, most of our consumers that walk through payday loan centers hand over their bank statements and you could clearly see why they are here, they live in the casinos."

There is another comment which I find stingy and crybaby-ish.

"Oh, if these laws pass, we just don't know what were going to do, probably just go out of buisness [sic]."

(more…)

As the Navy continues its push against military payday loans, it should be encouraged by the success of Pioner Services in helping clients this year.

The company saw the effects that such bad credit payday loans can have and set a goal to save military families $100 million in high-cost, predatory debt by providing educational opportunities and services that help service members break the financial debt cycle.

This week, Pioneer Financial Services announced that they've already reached the half-way point in that campaign, achieving more than $50 million in documented savings for service members and their families.

"To date, Pioneer Services Representatives have certified more than 17,000 military families in our 'Break the Debt Cycle' program," said Tom Holcom, president of Pioneer Financial Services Inc. "Part of the certification process is showing these families ways to break out of debt and work toward financial independence."

Amen. The savings are documented through the instant payday loan application process and meticulously recorded. As each service member reduces the amount of interest he or she will pay on credit cards, payday loans, and other high interest debt with the help of a debt management loan, the numbers are added to a detailed spreadsheet.

Pioneer Services Representatives expect to report $100 million in savings by the end of the year.

"We have helped thousands of families work on improving their credit scores and monitoring for identity theft. But the real excitement begins when they choose to enter their current debts into a series of financial calculators and learn they can save hundreds or thousands of dollars," said Holcom. "And every dollar a military family saves is a dollar they can add to a Thrift Savings Plan, a savings account, or use for everyday needs. All that matters is that they're able to focus on their duties, rather than on their finances."

That's the main trouble with a military payday loan. Yes, it causes fiscal hardship, or can. But it can also affect the readiness of those about to go into battle.

The Department of the Navy is continuing to fight payday loans through raising awareness of predatory lending and informing both sailors and their families about the pitfalls of dangerous debt cycles.

According to Keith Goosby, Financial Coordinator for Regional Support Office Task Forces in San Diego, Calif., predatory online payday loans may be putting sailors in financial peril, not only affecting their job performance, but in some cases jeopardizing security clearances.

"Overall readiness of the Navy is impacted when financial aspects of personnel are not what they should be. Additionally, shipmates are impacted when they have to deploy because of someone else's lack of financial readiness," Goosby said.

Francis H. Dong, Associate Director of the National Association of Securities Dealers, said that 75 percent of no faxing payday loan customers are unable to repay their cash advance in two weeks, the normal length of a loan. Dong also said active duty members are three times more likely to use a predatory lender than are civilians.

(more…)