Despite a meeting held last week on payday loan awareness in the area, it doesn't appear as though much will change on that front on South Carolina.

Governor Mark Sanford said he won't push for changes in the industry.

In a Sun News article, it was reported that Sanford see doesn't see the state following North Carolina and Georgia in outlawing super-high interest lending. Sanford's remarks came as the AARP decided payday advance and car title lending was their number-two priority for the 2007 legislative session.

At a meeting at the Grand Strand Senior Cente, Althea Truitt of Camden, said she recently found out her friend, who is mentally ill, has 10 payday loans.

"She is retired on disability. She no longer has fluid money. I had no idea that it could get that bad," Truitt said.

She thinks the industry should be banned or regulated because "they prey on poor people." If Sanford wins a second term in November, the Republican governor said he won't push for changes in the cash loan industry, though. He emphasized that he doesn't like payday lending, but said "those vendors are there because there's a demand for that product. Some of these folks can't get a loan at that lower rate."

Problem with payday loan enforcement: No fax payday loan lenders can be outlawed, but it would be difficult to enforce, Sanford said. The lenders charged $150 million in fees on more than 4.3 million loans in 2004 - closing more loans than the total population of South Carolina.

In Horry County, 52 new payday lending locations opened up between July 2005 and June 2006 - equal to one a week. Georgetown County has 20 licensed businesses. The industry is BIG business in South Carolina, which is home to Spartanburg-based Advance America Inc. The company operates in 36 states and is one of the nation's largest providers of fast payday loans.

Advance America wants to "work with local and state governments that help develop responsible use rules for the use of our services," spokesman Jamie Fulmer said.

Tougher laws that force the company to curtail or stop operations don't help consumers, Fulmer said.

Theresa Ross with Consumer Credit Counseling in Horry County counsels clients to go to a bank that will do small $200 to $300 loans, like Conway National Bank, instead of going to a payday cash loan lender. As long as individuals are aware of alternatives, it seems like it ought to be their decision to make.

In a match-up of payday loans versus Big Macs, the financial resources dominate the fat-laden entrees across South Carolina.

There are six cheap payday loan lenders for every McDonald's restaurant in the state. In 2004, these cash advance providers made over 4.3 million loans - more than the entire population of South Carolina.

The local AARP says that's too many. Therefore, the orgamization is sponsoring five Payday Lending Town Hall meetings around the state to hear from consumers, advocates, the faith community, credit counselors, lenders and others to discuss the need for reforms no fax payday loan industry.

The local meeting will be held at 5:30 p.m. Sept. 14 at the Grand Strand Senior Center at 1268 21st Ave. N. in Myrtle Beach.

NOTE: Below is a letter we received, via e-mail, from a resident of South Carolina who was recently spurned by a payday loan company. He believes he was the victim of false advertising, and wants to have his opinion heard.

If you have a story or viewpoint you would like to share with the Payday Loan Times and its growing number of daily readers, please use the Contact Us form and share it. Vulgarity, dishonesty or personal attacks aside, nothing is off limits at the Times.

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Let me start off by saying that I do not believe the payday loan industry in general is quote unqoute [sic] evil. I am not an activist nor do I feel that most payday loan companies treat people unfairly. However, I do believe that a growing number of online sites take advantage of borrowers through false advertisements.

I've used payday loans for years.

I don't like to, no one does, but there are a couple stores in my town and they have always been up front with me about all the fees. I know what I am getting into.

I've probably gone 5-6 times total over the past three years, not a lot really when you think about it. My experience has been good up until this year when I applied for a payday loan online.

I wanted to save time and keep this private so I though [sic] I would try to get a loan online. What happened really, really makes me mad. First I filled out a form and heard nothing from the payday loan company. After 6 hours I tried again, then was told when the representative DID contact me that I had to fax in my application.

The ad on the site said faxless payday loans! These sites don't even tell you key pieces of information like, oh, you might need to fax in your info after all. I could not believe it but this actually happened to me.

I don't have a fax machine at home. Never have. Got no use for one. Had I know [sic] that I was going to have to do this I would have just gone to the payday loan store like I have in the past. All in all I could not get my cash until the following morning so this cost me at least 12 hours, not to mention some head aches.

I'm sorry, but when you need a personal loan like this, you are strapped. I don't want to get into the details of my personal life here but anyone who has applied knows that when you need cash NOW, it's kind of a big deal to get strung along and lied to.

Again, I'm not opposed to payday loans as a general rule. I just think people should know that these no faxing payday loan ads are not what they are cracked up to be. If you need a payday loan go to the store in person, you get better treatment and, the so-called technology is not worth it in the end.

Edward R. Parker

Need cash groceries, but can't pay right now?

According to the Charlotte Observer, the Bi-Lo supermarket chain is rolling out a new store credit card that lets customers with a checking account and photo identification buy now and pay later. Advocates for lower-income consumers worry, however, that the program is too similar to predatory payday loans.

Officials with the company say BonusPay, introduced in all South Carolina Bi-Lo stores last week, is a way to help cash-strapped shoppers avoid fees associated with revolving credit or bounced checks. Bi-Lo operates more than 300 supermarkets in the Carolinas, Georgia, Tennessee, Alabama and Florida.

With BonusPay, shoppers are given a credit line of $50-200 and are charged $3-5 each time they use the card at the checkout, plus $4.99 for each month they use the card. The balance and fees are deducted from their checking account when they get their paychecks.

Like faxless payday loans, no credit check is required, nor is proof of income. In comparison, fees for bounced checks range from $30-70, depending on financial institution.

(more…)

At least one city in South Carolina has gone from trying to regulate payday loans to actually doing something about the cash advance issue.

Yesterday, the Greenville City Council barred pawnshops and day-labor businesses from locating near residential areas and restricted where short-term loan companies can operate.

The unanimous vote ended weeks of disagreement between some city residents who have described such firms as neighborhood "leeches" and officials from title loan, cash advance and instant payday loan companies who say they can't all be lumped in the same group.

Some residents, according to The Greenville News, said Monday night the measure doesn't go far enough, while attorneys and officials from payday advance companies defended their clients and said the city action amounts to "industry exclusion."

The payday loan battle certainly isn't over.

The City Council solved the problem of definitions by conditionally allowing some lending businesses in areas zoned for general commercial use as long as they keep 3,000 feet apart and are located in a grocery store or a shopping center of at least 30,000 square feet.

A report and a map from city staffers showed the space requirement would essentially limit new check-cashing companies, payday loanclenders and title loan firms to Haywood Road and parts of Laurens Road.

(more…)

Attorney Susan Berkowitz is a consumer advocate in South Carolina. She's witnessed the perils of payday advance lending for years now. While the future of payday loans in the state has been questioned recently, there doesn't appear to be an end in sight.

It's a dangerous business. What starts as one loan to cover an unexpected expense, or even groceries, often becomes two loans - the second payday loan used to pay off the first. Then it's a third loan, then a fourth and the cycle continues… Berkowitz said she met one client who was juggling 19 loans at the same time.

"The payday loan industry has learned to develop lending practices that take advantage of those who can least afford it," said Berkowitz, director of the South Carolina Appleseed Legal Justice Center, a Columbia-based advocacy group that provides legal services for the poor.

One of the problems is the stature of the payday loan companies in the state. These aren't tiny, mom-and-pop organizations; the nation's largest cash advance business is based in South Carolina, Advance America. It may be banned from offering payday loans in neighboring states, but in its home state, business is booming.

Payday loan controversy: Could corruption be stalling legislative action on payday cash advances? Two years ago, Gov. Mark Sanford hitched a ride to Seattle for a National Governors Association meeting on Advance America's private jet. Campaign spokesman Jason Miller said the governor was simply saving tax dollars by accepted the rise, which was legal under state ethics laws, because it avoided the use of state transportation.

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As the popularity of faxless payday loans increases in South Carolina, more and more consumer groups are taking action against these cash advances.

For example, Wednesday morning graduate students from the University of South Carolina met at the State House to persuade their representatives to pass new legislation restricting payday loans. The social work students say the high interest loans target those who lenders know will have a hard time repaying the loans.

USC grad student Tiffany Harris said: "They are just a debt trap for, specifically, low income families but also for military families and the elderly … a lot of times they get these loans because of a crisis, a bill needs to be paid, they can't afford to pay it. So they go out and get a very high interest two week loan, but chances are if they can't pay it now, they won't be able to in two weeks."

The students are asking law makers to, among other changes, restrict instant payday loans to one at a time per person. We'll keep you updated on their progress.

Perhaps more than anywhere else in the nation, South Carolina has seen an influx in the popularity of payday loans. While some struggling individuals welcome the cash advances, various consumer advocates are not as sure.

“There’s nobody else out there willing to lend these individuals with [bad credit] money,” said credit counselor Schrendria Robinson.

Payday loans look like the perfect solution, but credit counselors say the quick-fix cash causes problems - now the State House is taking on the issue.

Since Georgia and North Carolina banned the quick loan companies, many of them have moved to South Carolina. Since 2000 the number of these stores have doubled, according to a recent study by AARP, and credit counselors say so has their case load. Robinson’s agency helps at least 50 people a week.

That’s why counselors support a new law legislators are considering.

The law would limit the number of payday loans a person could possess at a time - to only one. Credit counselors say it would help put an end to what has become a vicious cycleof debt

South Carolina lets payday loan lenders charge 15 cents for every $1 borrowed, with the money due in some cases in as little as two weeks. That’s an annual interest rate of nearly 400 percent.

“Unless something is done quickly, we’re just going to see more people in our state filing for bankruptcy and more people getting into worse financial trouble,” said Robinson.

South Carolina is one of the more popular destination for those seeking payday loans. Unlike a few surrounding states, this area continues to thrive with payday advance locations spread throughout.

One of the more successful payday loan lenders, however, World Acceptance Corp., recently underwent a few shake-ups. For starters, chief executive Doug Jones has left the operation.

The announcement, made before trading started Friday, came one week before World Acceptance closes the books on its fiscal year 2006 and a week before Jones’ employment agreement is up for renewal. The Charlotte Observer covered the story.

A. Alexander McLean III, the company’s longtime chief financial officer, is replacing Jones as chief executive of this payday loan and consumer finance agency.

“We appreciate the contributions that Doug has made during the past six years, but the board of directors has determined that a change in leadership is in the best interest of the company at this time,” James R. Gilreath, chairman of the World Acceptance board’s Compensation Committee, said in a statement.

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As various states are urged to fight back against cash loans, these cash advances remain popular in a number of areas around the country. The following is a breakdown of payday loan activity across certain states (based on 2004 data):

• 1,027 loans per 1,000 residents
• 4.4 million payday loans
• 918 payday stores