Mail-In Campaign Focuses on Washington Payday Loan, Cash Advance Lending
By Paul RizzoPayday Loan Writer
There’s a new mail campaign urging state lawmakers to leave the check cash advance lending business alone.
The industry has come under attack for how much it charges and now, some lawmakers are questioning how genuine the postcard campaign really is.
We’ve all been told that writing your lawmakers is one of the most powerful things you can do to be heard and enjoy some influence. But some lawmakers are suspicious of this campaign because many of the postcards were addressed in the same handwriting - and there are accusations flying about what savings account payday loan customers were told:
When Anthony Vicari applied a couple weeks ago for a payday loan, he says the workers gave him and other customers in the store the hard sell, telling them to fill out postcards to their state lawmakers.
“They were saying, the Legislature is going to make payday lending illegal, you won’t be able to pay rent or your bills, essentially, you’re going to be dead in a ditch if you don’t do something about it,” he said.
At the state capitol, legislators are getting flooded with the cards. They’re considering a bill that would limit the interest rates on no fax needed payday loans to 36 percent. Right now, the stores charge roughly $15 for every $100 borrowed; that works out to an annual percentage rate closer to 400 percent.
Representative Sherry Appleton is leading the fight to crack down and says the postcard campaign will not persuade her to give up.
“These are desperate people, they are going into get a loan, because they need it. I believe it’s indirect coercion, because I think a lot of people feel, whether it’s true or not, that they’re not going to get their payday loan unless they fill these out,” said Rep. Sherry Appleton, D-Kitsap County.
“It’s like false public comments to your state legislators, saying I love payday lenders, they’re my best friend, when that’s not the case,” said Vicari.
Vicari acknowledges, he did get his bad credit cash loan even though he refused to sign the postcard.
In a letter to lawmakers, Moneytree CEO Dennis Bassford says his company is not coercing anyone to sign the cards, but he is trying to get across his view that the annual interest rate is not relevant because these are short-term loans, typically paid off in two weeks.
Payday lenders have found support in Representative Steve Kirby, who introduced a bill that would keep interest rates the same but give people the option of a 60-day payment plan on any cash advance online.
“It takes payday lenders and turns them into 60 day loans right anyway,” said Rep. Steve Kirby, D-Tacoma.
Rep. Kirby is the chair of the committee overseeing financial services. He says that bill, limiting interest rates to 36 percent, is not getting past his committee.
Rep. Appleton says she is not giving up.
The president of Moneytree says 36 percent would not cover the cost of issuing payday advance loans; his stores would simply be forced to stop offering them.
