Rhode Island Regulators Reject Payday Loan Store Application
By J.J. CameronPayday Loan Writer
According to The Providence Journal, state regulators this week denied an application from a national chain, Check 'n Go, to open a store in the Olneyville neighborhood.
The ruling, signed Tuesday by the state's director of business regulation, A. Michael Marques, followed an outcry from local businesses and community groups, which argued that the proposed cash advance payday loan outlet would be harmful to the financial welfare of Olneyville, one of the city's poorest neighborhoods.
Payday loan lenders, typically, differ from traditional check-cashing services, which charge a fee for cashing payroll, government or personal checks. In Rhode Island, however, both check-cashing services and payday lenders are licensed as check-cashers, regardless of whether they provide payday loans or not.
Check 'n Go, a subsidiary of the Ohio-based Eastern Specialty Finance, operates 1,320 offices in 35 states - including two in Rhode Island.
Past payday advance approval: In April, state business regulators approved licenses for two Check 'n Go offices - one at 1565 Post Rd., Warwick, and another at 1500 Diamond Hill Rd., Woonsocket.
But an application for a third location to provide instant cash loans - at 579 Atwells Ave. in Providence - prompted a response from local check-cashing businesses and community groups.
At a hearing in June on the license application, the president of Ocean State Check Express, Joseph Baginski, testified that Providence already has more than enough check-cashing agencies to serve the area and that four to six new check-cashing licenses were issued in the Providence metro area within the last year.
Ocean State Express operates a check-cashing store less than a half-mile from the proposed Check 'n Go site on Atwells Avenue.
Community groups whose members testified against licensing the new payday advance loan store were the Olneyville Collaborative, YouthBuild Providence and Rhode Island ACORN.
"Given the applicant's insistence that the company's middle-class customer is at the core of the demographics served by its product," the decision states, "the company's choice of locating in Olneyville is a curious one."
The decision cites 2000 census data showing that Olneyville is Providence's poorest neighborhood, with a median income of just under $19,700, compared with a citywide median of about $32,000. Sadly, these are usually ripe clients of quick cash loan providers.
"The applicant did not demonstrate that access to short-term credit would promote the needs of the community," the decision states, "or the public convenience and advantage."
The associate director of the Department of Business Regulation and superintendent of banking, Dennis F. Ziroli, and the deputy chief of legal services and hearing officer on the case, Michael P. Jolin, recommended that the director, Marques, reject the application.
Rhode Island and New Hampshire are the only two states in New England that allow personal loan lending of the payday variety.
