The interest rate cap that Congress recenly agreed on for military cash advances may be having a domino effec. Numerous states are now considering regulations on regular and faxless payday loans.

For example, Bellingham YWCA's Soapbox Series will include two community forums this month highlighting economic issues. One of them involves home ownership opportunities; the other focuses on bad credit payday loan use.

Representatives from the Poverty Action Network will speak at "Quick Loans or Quicksand?" a call for stricter controls in the cash loan industry, at a brown-bag lunch at noon Oct. 19 and at a 6:30 p.m.

The is free and will be in the YWCA ballroom.

A recent editoral in The Idaho Statesman doesn't blame JUST payday loans for the record number of residesnt filing for bankruptcy. But it doesn't exactly defend these resources, either.

Here it is, paraphrased:

One problem is a state law that allows storefront and online payday loan lenders to charge whatever interest rates they can get from consumers. Politicians cannot legislate common sense and frugality. However, they can and should cap interest rates and protect consumers.

As Idaho has lost good-paying manufacturing jobs and replaced them with lower-paying service jobs, many Idahoans are staring at too much month at the end of the money:

• They filed a record 9,660 bankruptcies in 2003. That means one of every 55 households filed for bankruptcy protection.

• They are failing on their home mortgages in increasing numbers. Foreclosure rates averaged 12.2 per thousand in the first three months of 2004, up from 9.4 in 2000.

• They have used their plastic - a lot. The average household is carrying $10,000 in credit-card debt. It's little wonder why use of cash advance loans has grown in the state.

• They have fueled a demand for payday and auto-title loans - short-term and high-interest transactions. The state had 318 payday and title-loan lenders in June, nearly double the 162 in the state four years earlier.

While payday loans and title loans account for only one-tenth of a percent of Idaho consumer loans, business is growing. Outstanding loans totaled $8.3 million last Dec. 31, up from $7.6 million three years ago.

The laissez-faire Idaho Credit Code, passed in 1983, replaced laws dating back to 1957, which capped interest rates. The Credit Code - billed as a way to "simplify, clarify and modernize" credit laws — bans only "unconscionable" loans. But as House Business Committee Chairman Max Black, R-Boise, points out, the law does not define unconscionable.

A judge must decide if the interest rate is fair, if the no fax cash advance lender was honest and if the borrower was competent to sign on. All that also assumes someone files a lawsuit.

The credit code works for consumers because it allows savvy shoppers to find the best interest rates, said Gavin Gee, director of the state's Department of Finance. Before 1983, lenders pushed to the maximum rates allowed under usury law, rather than offering lower rates to entice business.

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According to a report from Arizona Central, Tom Rawles told Mesa City Council Members he'd be voting "no" before a formal date was even set for a public hearing.

Rawles made his stand during Monday night's city council meeting. On October. 16, Mesa residents can tell him to his face whether or not they agree with him.

What's the issue at stake? A proposed ordinance that would establish a minimum distance of 1,200 feet between new cash loan shops. Existing shops would not be affected.

Rawles has said repeatedly that this type of government regulation is tantamount to a racist public policy. Mayor Keno Hawker and Councilman Scott Somers have said they are leaning toward also voting it down. They agree with another reason Rawles opposes the ordinance: Government should not have the power to intrude upon the free market.

"They fill a niche," Somers said in an interview. "They offer small, short term loans that no other business does."

However, Vice Mayor Claudia Walters says she is pushing for the ordinance. Quick cash advance stores are mushrooming in west Mesa, which Walters represents, and residents there don't like it.

"People are concerned when they see (payday loan stores) that it indicates a neighborhood decline," Walters said last week.

The number of regular and/or faxless payday loan operations located in Mesa has nearly doubled in two years. As of July, the city was home to 111, said Gordon Sheffield, a Mesa zoning administrator. In July 2004, there were 63.

The businesses are considered "financial office(s), similar to a bank," Sheffield said. Therefore, anyone who wants to open a cash advance shop may do so where zoning designations permit it. As of September 2005, the number of payday loan stores in Arizona had nearly tripled to 610, and there were more offices across the state than McDonald's restaurants and Starbucks coffee shops combined.

Arizona had a higher number of instant cash loan offices per capita than the national average. The Arizona Republic last year found that 70 percent of payday loan offices in Maricopa County are congregated in low- to middle-income areas where the median household income is below $45,000, the county average.

Overall, payday advance offices in the county collect about $99 million a year in interest or fees.

On Tuesday, consumer advocates urged legislators to limit high-interest, short-term cash loans to the same 36 percent annual interest rate cap that applies to other lenders in Virginia.

Representatives of the payday loan industry, however, said such action would force them out of business, denying cash-strapped borrowers a convenient source of credit that can be less expensive than fees for bounced checks or late credit card payments.

"A 36 percent cap is a de facto ban on the storefront lenders," said Carol Stewart, vice president of government affairs for Advance America, the nation's largest payday lender.

Critics argued that borrowers often get trapped in a cycle of debt as they repeatedly renew their loans, which have average annual interest rates pushing 390 percent, or borrow from one payday lender to pay off another.

"People end up simply servicing their debt while never being able to retire the principal," Neil Walsh, a lobbyist for AARP Virginia, told the House Commerce and Labor Committee. "This is not financial assistance - this is financial disaster."

Payday advance legislation: Del. John O'Bannon III, R-Henrico, is sponsoring legislation for the 2007 session to repeal the 2002 law that exempts no faxing payday loan lenders from the 36 percent cap.

Moreover, Del. Glenn Oder, R-Newport News, has filed a bill prohibiting making a payday loan to anyone who already has three such loans outstanding and creating a database to ensure compliance.

"We left the gate open, we let the horse get out and we've got to find a way to get it back under control," Oder said.

Payday cash loan providers promote the product as a way to deal with a short-term cash crunch, such as an unexpected car repair or medical bill, but don't prohibit reborrowing. O'Bannon said only one percent of Virginia payday loan customers use the service just once a year.

According to state banking regulators, the average customer borrows from the same store 7.5 times in one year.

"Repeat borrowing is the lifeblood of the payday loan industry," said Jean Ann Fox, consumer protection director for the Consumer Federation of America.

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The federal government in Canada is planning legislation that will allow provinces to place a tighter grip on the burgeoning fast cash loan industry.

According to The Ottawa Business Journal, the bill will give the provinces the power to cap the interest rates these companies can charge. Critics of the industry have described the rates charged on short-term online payday loans as "unconsciously usurious" and called for tougher regulation.

The Criminal Code makes it an offense to charge an interest rate of more than 60 percent a year. However, fees and interest rates on payday loans can often run much higher. Until now, no one has been much inclined to do anything about it.

In Canada, the average faxless cash advance is about $280 for ten days and costs about $57 in fees and interest charges, according to the Canadian Payday Loan Association.

Manitoba has led the charge for tighter controls on the industry, but Ontario is balking. It says the current Criminal Code provisions should be adequate to control payday lenders and doesn't see the need for provincial regulation.

Meanwhile, regular and no fax payday loan companies operate in all provinces except Quebec.

Officers arrested a 22-year-old transient Monday afternoon after she used a counterfeit pay stub in a failed attempt to acquire a $600 payday advance loan.

Officers were called to Quick Cash (12219 E. Sprague) around 2:30 p.m. when Ivy R. Ramos, also known as Ivy Maine, presented the counterfeit Alpha Electrical Contractors pay stub while applying for a loan.

Employees at Quick Cash called the company to verify employment and learned that not only was Ramos not an employee, she had used the same counterfeit pay stub at at least two other bad credit payday loan businesses.

Ramos had completed a signed loan application stating she was an Alpha Electrical employee who takes home $1,300. She told Officer Aaron Childress that she intended to use the $600 quick cash advance to get her car out of impound and to rent a motel room.

Childress seized the counterfeit pay stub and drove Ramos to the Spokane County Jail. He booked her on a felony Forgery count and placed the stub on police property as evidence.

Investigation into other regular and/or no faxing payday loans made by the suspect continues.

Janette Helmick is a member of the Virginia Interfaith Center for Public Policy. She recently wrote the following, paraphrased article for The Free Lancee-Star:

Many of the decisions I make day to day involve a subconscious cost-benefit analysis. Americans, the ultimate consumers, have been taught to evaluate the value of any situation by comparing how much they can get for the least amount expended.

And I'm not just talking about money, although I will admit shopping occasionally at Wal-Mart just because it offers goods for a minimum expense. I'm also referring to our interactions with others - what expense will I pay for making a hurtful comment or lying to a friend?

We measure our success in life by minimizing expense and maximizing return. I think this makes sense in the context of predatory regular and faxless payday loan lenders.

These lenders have reaped enormous profits based on business practices that allow for little expenditures and deep returns on investment.

They're just thinking like a consumer, albeit a greedy one. But at whose expense?

The borrowers of cash loans and car title loans are often left financially bankrupt. After only several loan cycles for either of these types of predatory lending, borrowers realize they've been caught in an inescapable debt trap. Interest rates upward of 350 percent, extra fees, and tacked-on principal make it unlikely that a customer can ever pay back the loan.

Moreover, lenders rarely encourage them to pay it off anyway -their business model feeds on the ability to roll over cash advance loans for the price of mounting interest. They wish to ensnare a borrower for years, one who will faithfully return every two weeks or one month to pay interest and avoid cruel collection practices, repossession of assets, or a hijacked checking account.

They hook desperate borrowers and bleed them dry.

There comes a time when all decisions, business and otherwise, must take into consideration expenses that can't be measured monetarily. Predatory lenders are a huge expense to more than just the borrowers:

Over half of payday loan and car title lenders are owned by out-of-state companies. This means that Virginia's economy suffers as hundreds of thousands of dollars flow out of our borders.

Taxpayers who are able to maintain a level of financial stability pick up the tab for social services necessary to keep victims of predatory, no fax cash loan lenders afloat.

Our tax dollars are also siphoned off by predatory lenders that accept Social Security benefits as income, and help themselves to those government checks. Additionally, responsible business owners are detracted from opening up shop next to a payday or car title lender.

Even a precursory cost benefit analysis shows that this expense is just not worth it. Virginia cannot afford these consequences.

I urge Virginia's state legislators to think more deeply about the dangers of continuing to allow providers of no fax payday loans to exploit Virginia and her citizens. Several responsible bills, like Delegate O'Bannon's proposed repeal of the Payday Loan Act, and Delegate Morgan's legislation that caps car title interest rates at 36 percent, are reasonable and responsible regulations on these harmful industries.

Each and every legislator should support the goal of these bills in the next session. All members of the Virginia General Assembly could arrive at this obvious conclusion by asking themselves one simple question when voting on predatory lending bills:

"At whose expense?"

According to The Chronice Herald, it doesn't matter who does the math: The Cash Store and many other payday lending companies are charging interest rates that violate the Criminal Code of Canada.

Based on its own calculations, The Cash Store is not charging an annual interest rate of over 300 percent, as alleged by the Nova Scotia government, Andrew Fraser, the lawyer representing The Cash Store, told the Nova Scotia Supreme Court on Monday.

However, Mr. Fraser conceded that the payday loan company is charging an annual interest rate that exceeds the 60 percent limit allowed under the Criminal Code of Canada.

To date, Manitoba is the only province where criminal charges have been laid against a payday lender for charging excessive interest rates. That case against Paymax Canada Inc. is still before the courts.

Asked Monday why Nova Scotia hasn’t moved ahead with criminal charges against providers of quick cash loans, provincial Justice Department lawyer Agnes MacNeil said it is up to police.

"Generally, police would lay the charges and the police have been informed, I believe, of the criminal rate of interest being charged. And it would be their decision and that of prosecutors whether or not criminal proceedings would be pursued," she told reporters following court Monday.

Many provinces - and the Canadian Payday Loan Association, which represents most payday lenders in Canada - argue that in order to better protect consumers the federal government should amend the Criminal Code and give the provinces the authority to regulate the growing cash advance payday loan industry, setting interest rates.

The federal government recently said it will move ahead with amendments to the Criminal Code this fall and give the provinces the authority to regulate the industry. But not all critics agree that this is the best move to protect the rights of consumers.

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Not surprisingly, The Center for Responsible Lending has issues a statement praising the recent Congressional agreement to limit rates on military payday loans.

Here's a paraphrasing of the release from President Michael Calhoun:

At a time when America's service men and women are making sacrifices for all of us, the least the rest of us can do is try to put them out of financial harm's way.

That is why I am tremendously pleased that a joint House-Senate conference committee last week approved a bill that would cap instant cash loans to soldiers, sailors and aviators at 36 percent. That is the same amount many states impose as the maximum in their usury laws to prohibit loan-sharking.

These lenders, whose shops cluster around military bases preying on young and financially unsophisticated soldiers, make borrowers sign a postdated check including fees. When full payment is due at the next payday, usually in two weeks, the borrowers can seldom repay the entire amount and must roll the regular or no faxing payday loan over again, racking up still more fees – the industry's goal.

That amounts to an annual percentage rate of more than 400 percent. The average borrower pays back more than $800 for a typical loan of about $340.

The Department of Defense issued a report recently saying these cash advance loans were hurting military preparedness and the country's ability to protect itself. The report endorsed a cap of 36 percent, and the Pentagon's courage and persistence in standing up to these predatory lenders – and their ubiquitous and powerful lobbyists on Capitol Hill – are in the highest tradition of the military.

Today our military, and the veterans and consumer and civil rights groups that stood up with it, have won a tremendous victory. Let there be no mistake:

Senators Jim Talent, a Missouri Republican, and Bill Nelson, a Florida Democrat, with their amendment have protected thousands of service members and their families from financial catastrophe and misery – the people who have the most important job in our country: keeping us safe every day.

So let us take a little time today and celebrate this victory against the predatory payday cash advance lenders. And then let's get back to work and extend these protections to all of America's working families."

As Advance America faces a lawsuit and growing criticism, it has responding by coming out with a new ad campaign for its products.

The nation's largest provider of payday advance services has developed five television commercials; each profiles a real person engaged in their occupation - a paramedic, a gym teacher, a waitress, a bus driver and a shoe salesman - and each serves an important role in our society.

The spots address the occasional financial challenges faced by hardworking Americans and pledges support from Advance America, ending with the tagline, "Because you advance America."

"There is a tremendous misunderstanding about the individuals who use [payday cash loans]," said Trudy Boyles, chief marketing officer for the Spartanburg, S.C., company. "The majority are hard-working Americans with middle-class incomes, and almost half of them own their own homes. We want to correct any misperceptions about our customers, thank them for what they do to make our cities and towns run, and let them know we're here for them when they need us."

The campaign was developed by Greenville, S.C., ad agency Erwin-Penland, part of The Interpublic Group's Hill, Holliday, Connors, Cosmopulos.

Backyard Productions' Chace Strickland, whose award-winning work includes commercials for Wachovia, Chevy, Campbell Soup and Michelob, directed the spots.

"The [faxless payday loan] industry is one of the most misunderstood industries in our nation, and the advertising has a lot to do with it," said Erwin-Penland Executive Creative Director Andy Mendelsohn.

"The misperception is that [quick cash advance] lenders are out to take advantage of people, when in fact they provide a valuable service for millions of Americans who may not have the financial alternatives some of us enjoy. We developed this campaign to speak for them as much as to them, to defend their right to use payday loans responsibly so they can go on with their lives."

Commercials will air in television markets across the country through November 30. The campaign will also include radio and direct mail in select markets.