Over the last couple of years, the faxless payday loan market has changed in various ways, and consequently, a firm looking to remain competitive knows it has to be adaptable.

For their lasting scuess, many of Internet's top performing payday loan companies can credit FHL Investments, whose marketing strength generates extraordinary results for lenders. Providing comprehensive online business strategies to give lenders immediate access to the customers they need, FHL generates upwards of 10,000 payday loan applications a week.

The agency strives to position itself as a cost-efficient, results-driven solution to payday loan lenders' marketing needs. FHL Investments realizes that in this challenging, competitive market, payday loans and the companies that issue them can be freed of the marketing burden.

That way, they can focus on working with the customer and bettering their overall operational management. The competition to serve borrowing needs has never been hotter, yet there is growing pressure within the payday advance loan industry to be more efficient in assuring the quality of borrowers, keeping fees low and profits high.

That’s precisely why the industry has turned to FHL Investments time and again for marketing strategies that yield tremendous conversion rates of the most qualified payday loan applications, keeping lenders' operating costs way down.

Quietly existing behind the scenes, working with some of the industries' strongest lenders and steadily rising to the top of the payday loan lead generation business, FHL is poised to be a force for years to come.

Every day Keith Wittenberg goes online, searching for attractive listings. But he is not in the market for collectible baseball cards or a cell phone, nor is he scouring eBay for random junk. He's on Prosper.com, looking for people in need of his money.

America's first people-to-people lending marketplace was launched by E-Loan co-founder Chris Larsen, who raised $20 million for the venture and got it underway this past February.

The site behaves much like eBay, in that people hoping to borrow money can create a listing with photos, a description and the interest rate they're willing to pay.

Prospective lenders search the site for a loan option that offers enough interest to compensate for the risk of sending money to strangers.

Wittenberg, a radiologist and father of three in St. Paul, Minn., made his first $50 bid in early March. Less than four months later, he has lent a total of roughly $24,000 cash loans to about 120 people.

He lent $75 to a mother and special education teacher in Laguna Beach, Calif., who dreams of becoming a lawyer and requested $5,500 to go to the dentist, consolidate credit card debt and pay off a payday loan. She received 100 percent of the requested amount from 12 bidders, who will each earn 28 percent interest.

It's a rate most Americans consider astronomical, but for those stuck in a faxless payday loan cycle, it's lower than they're paying now.

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The opinion of a recent letter to the editor of The Providence Journal doesn't give the okay to military payday loans - but it does focus the bulk of the problem elsewhere. To paraphrase: 

While many critics believe the instant payday loan services should continue to serve the military community within certain guidelines, this seems to miss the real problem.

American soldiers and sailors use these companies because their pay doesn't make ends meet. Having served for 19 years in the Army Reserves (think of the money you're saving because they didn't let me finish my 20 years), I can speak with authority on the low wages for the people responsible for guarding our nation's freedom.

Some of our service people are fighting and dying for less than $20,000 a year. Meanwhile, their families have to find creative ways to save money, scrimp, and work extra, just to feed the kids. And when the money falls short, the predators lurk outside the gate, ready to take advantage of the situation. These payday loan operations are nothing more than war profiteers - and the U.S. military should solve this problem by paying its soldiers and sailors what they are worth.

To look at the current pay scale, you would think our government views our soldiers and sailors as worthless, and the technology they carry as far more valuable. Technology doesn't stand guard when the barbarians are at the gate; soldiers and sailors do. It is about time we paid them what they are worth. 

- Derek Tabor 

Until Mr. Tabor's points are considered and wages are raised, military payday loans will remain a necessity for many families.

While Advance America may have reported strong growth last quarter, stock news tells a different story. 

Shares of the payday loan company plunged on Thursday afternoon, after the firm released the aforementioned second-quarter earnings report showing results saddled by regulatory changes and high costs.

To be exact, Advance America fell $4.54, or 25.3 percent, to $13.36. The company's shares had traded in a range of $11.58 and $18.33 in the past year.

Sure, revenue rose 4 percent to $155.9 million from $150.3 million - which is what the instant payday loan business emphasized. But analysts polled by Thomson Financial don't see as bright of a future.

The company admitted regulations in Illinois, Pennsylvania, Arkansas and Indiana are hurting earnings. Specifically, regulatory action in Pennsylvania and Arkansas reduced revenue by $9.6 million, and similar changes in Illinois and Indiana cut revenue by $4.3 million, Advance America said.

The changes included lower interest rate caps and limits on borrowing, which lower fast payday loan volumes.

"It forced Advance America and other companies to find another way to do business in those states," said Stephens Inc. analyst Dennis Telzrow.

Earlier this week, we reported that Missouri Senator Jim Talent was pushing for military payday loan reform. Now, over 70 consumer advocate and veteran groups are joining the fight, calling on Congress to enact the proposed cash advance amendment.

They argue that this predatory instant payday loan business doesn't just ravage service members and their families. It makes our military is less prepared.

Senator Talent amended the Defense Authorization (Senate Bill 2766) to cap interest rates on loans to service members at 36 percent - the same cap imposed by many states to thwart usury and payday loan sharks. A House-Senate conference committee must now approve the amendment for it to become law.

Consumer and veterans groups are urging committee members to do what is clearly the right thing and vote for the fast cash loan amendment to pass.

"We need your help in protecting military families from companies that target them with exorbitantly priced loans," the groups said in letters to Congress released today.

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The nation's biggest payday loan company, Advance America, reported the results of its operations for the second quarter and six months ending June 30, 2006, and the results were increased revenues across the board. The company boosted its earnings by 6.7 percent to $308.1 million, compared to $288.7 million for same period in 2005.

Total revenues for the quarter ending June 30, 2006 increased 3.7 percent to $155.9 million, compared to $150.3 million for the quarter ending June 30, 2005. For the quarter ending June 30, 2006, revenues for its payday loan centers opened prior to April 1, 2005 and still open today increased 4.6 percent compared to the same period in '05. 

When excluding locations in Arkansas, Illinois, Indiana, and Pennsylvania, where legislative and regulatory changes negatively affected the company's ability to issue no fax payday loans, and have hampered potential revenues accordingly, revenues for the quarter increased an impressive 17.4 percent.

"This was a challenging quarter, but one that also underscored the overall strength of our business model. We experienced new regulatory changes, which caused us to alter our business model in Pennsylvania and Arkansas and reduced revenues for the second quarter," President & CEO Ken Compton commented.

"In addition, the company continues to experience the effects of previous legislative and regulatory changes in Illinois and Indiana, which we believe improve the regulatory landscape, but have impaired our results for the second quarter. We remain encouraged by continued consumer demand for the payday cash advance product and strong growth rates in the other 32 states in which we operate."

In Illinois and Indiana, modifications to state-based legislation, which the company supported, resulted in a $4.3 million reduction in revenue for the quarter ending June 30, 2006 compared to that same period a year ago. The cash advance provider opened 46 and 88 new centers during the second quarter and six months ending June 30, 2006.

As of June 30, 2006, the firm had expanded its national operating network to a total of 2,670 faxless payday loan stores in 36 states.

Here is scary news: the American public now has a negative net savings rate. Home prices, medical care, and college tuition are all growing faster than wages, while debt has become increasingly pervasive among American households.

Individuals are aware of the problem, as 82 percent now recognize household debt as a serious dilemma, according to a recent survey sponsored by the Center for American Progress. So, why isn't the issue atop the agenga for national policymakers? Where do they weigh in when it comes to instant payday loan use?

The Center for American Progress survey found that both Republicans and Democrats (by more than 80 percent margins) agree that:

• There should be more incentives for people to save money
• Online payday loan lending companies should provide simple and uncomplicated language that explains their charges and fees
• More education and counseling should be provided to customers
• There should be caps on the rates of interest that credit card companies charge

So why have no real efforts been made on these fronts? The Center for American Progress has launched an effort to draw broader attention, especially among lawmakers, to the issue of household debt and overall quick payday loan use.

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As previously reported, entering into the payday loan world has been a good business decision for EZCORP, Inc. This fact was emphasized today when results for its third fiscal quarter, which ended June 30, were announced.

For the period, EZCORP's net income increased 163% to $5,608,000 ($0.40 per share) compared to $2,129,000 ($0.16 per share) for the quarter ended June 30, 2005. Total revenues for the third fiscal quarter increased 31% to $73,786,000 while operating income improved 155% to $8,040,000.

Overall, the instant payday loan company has 288 EZMONEY locations and 82 EZPAWN locations across the country. It specializes in short-term, non-collateralized loans, often referred to as payday loans, or fee based credit services to customers seeking loans.
President and Chief Executive Officer, Joe Rotunda, stated:

"We continue to be pleased with our strong momentum and the continuation of our five-plus year trend of growing our earnings and profitably expanding our business. Our fiscal third quarter is the 16th consecutive quarter of year-over-year earnings growth. This quarter we increased earnings 163% over the prior year quarter.

We are especially pleased with the strong performance of our pawn operation as well as the continued strong performance of our signature [faxless payday loan] business."

No so fast!

That's the message Fair Finance Watch, a financial services watchdog, has given to Wachovia Corp. The issue at stake is the proposed $25.5 billion acquisition of Golden West Financial by the latter company.

In a 15-page challengefiled July 24 with the Federal Reserve Board in Washington, Fair Finance asks the Fed to hold public hearings on the merger's potential to raise prices ; along with what it says is Wachovia's continuing enabling of instant payday loan lenders and the disparities in Wachovia's 2005 mortgage data. The group requests that the Fed deny Wachovia's application to buy Golden West.

Reasons behind the objection: An analysis by Fair Finance Watch of Wachovia's 2005 mortgage data showed that African Americans and Latinos who borrowed from Wachovia and its affiliates were confined to higher-cost loans or denied loans far more frequently than white borrowers.

Moreover, the group isn't pleased Wachovia's continuing relationships with and financing of faxless payday loan lenders and pawnshops, despite bank policy statements to the contrary. A Wachovia spokeswoman would not comment specifically on any of the allegations in the Fair Finance Watch challenge.

The bank's prepared statement said:

"Wachovia has a long history of commitment to our community. We look forward to building on our legacy of community excellence and extending the reach of our community programs and products in Golden West Financial's markets."

But will this be possible if they continue to be in cahoots with pay day loan providers?

With regular paychecks, little financial experience, and the responsibility of having to deploy at a moment’s notice around the world, members of the military are perfect prey for predatory lending institutions offering high-interest payday loans.

“Lenders know they’re going to get a paycheck out of someone in the military. Plus, service members travel a lot and are away from their support networks. Overseas, they might not know their options,” Kelley Finch, the Navy-Marine Corps Relief Society’s outgoing director at Yokosuka Naval Base, said.

Although agencies offering faxless payday loans aren’t springing up around military bases in Japan and South Korea like they are in the lower 48, U.S. service members needing quick cash or lower monthly credit debt payments still get caught in the downward spiral of debt. In Japan, armed forces members simply find them online.

The Navy-Marine Corps Relief Society (NMCRS) is tracking the problem in Yokosuka and have seen about 10 cases in the region this year.

“It seems to keep increasing,” said Chuky Spivey, the group’s incoming director.

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