Consumed by payday loans: State legislators offer haven for lenders deemed ...
Facing government crackdowns around the country, payday lenders are thriving in lightly regulated California, where they lure hundreds of thousands of desperate borrowers a year despite punishing, triple-digit interest rates.
Seventeen states and the U.S. military have effectively banned payday loans, which attract low-income borrowers who need a cash advance on paychecks. Georgia has declared payday lending to be felony racketeering. But in California, payday storefronts outnumber Starbucks coffeehouses.
Neon-splashed businesses touting slogans like "Cash as Easy as 1, 2, 3!" promise hassle-free, short-term loans, while few borrowers heed the fine print: A two-week loan will saddle them with what amounts to an annual interest rate of 460 percent.
Now, the multibillion-dollar industry is looking for more help from a state Legislature that has protected payday lenders for years.
A Bay Area News Group investigation shows payday lobbyists are pumping increasing amounts of contributions into campaign coffers, targeting lawmakers with low-income constituents who use payday loans. And some of the biggest recipients of that money are now backing an industry-friendly bill that would boost loan amounts and fees, fueling the lenders' bottom lines while driving many recession-battered Californians deeper into debt.
"There's a crackdown going on in all the rest of the states, and payday lenders are trying to figure out how to offset the lost revenue," said Uriah King, vice president of state policy for the nonprofit Center for Responsible Lending. The lenders, he said, have decided "to make up the difference on the backs of struggling Californians."
Despite outcries from consumer advocates -- who liken payday loans to financial quicksand -- the author of Assembly Bill 1158, state Assemblyman Charles Calderon, D-City of Industry, calls them "the best loan on the market."
The lawmaker, considered the father of payday lending in California, insists he doesn't see the loans as a threat to his constituents. Instead, during a May hearing on his bill, Calderon described them as a solution for a single parent short on money for a child's prescription, or someone "wanting to borrow $50 to take their kid to Disneyland.
military pay day loans - News
Payday loan companies with high interest rates are targeting Army personnel and ex-servicemen, an MP has warned. Dr Stella Creasy, who is an MP for Walthamstow, expressed her fears for British troops after discovering evidence to suggest financial
Seventeen states and the US military have effectively banned payday loans, which attract low-income borrowers who need a cash advance on paychecks. Georgia has declared payday lending to be felony racketeering. But in California, payday storefronts
Petraeus is also examining overall indebtedness and how people in the military and their families use payday loans and other high-interest loans. Pawnshops and payday lenders surround military bases, Petraeus said, and members of the military are
“If it's not good for the military, why is it good for everybody else?” Day was referring to legislation passed by Congress in 2006, capping interest rates on payday loans made to US military members and their families at 36 percent.
The Department of Defense has described payday lenders as "predatory" and a threat to troop morale and national security. Congress passed a law capping interest rates at 36 percent on payday loans made to US military service members.
Payday Loans For Urgent Financial Needs Of Military Personnel ...
Because they constantly engaged in the security concerns of the country, military personnel normally have little or no time to devote to monetary issues. It is a fact that these problems can happen to any family or individual most especially in this tough economic environment. Military payday loans are designed provide solution to urgent cash needs of military personnel between paydays. Another great feature of this type of payday loan is its instant availability. Since the earnings and occupation details of military personnel are readily available, processing of application for military payday loans is done quickly.
The procedure for getting access to this kind of credit is actually easy. A military staff that wants to apply for a financial loan simply needs to submit a personal post-dated check that indicates the amount of the loan that includes the service being charged by the lender. The loan provider then issues a check to the borrower that includes the total amount of the loan minus the service fee. In the date of payment, the lender draws the money back through the check submitted by the borrower.
Just like any other type of payday loans, military loans are really practical given that the lenders do not need to check the employment or income details military personnel. Upon approval, borrowers are able to get their money normally within the same business day. For this particular type of loan, there is no need for military employees to present any collateral to the lender. This is because the lender has already secured the loaned amount through the post-dated check provided by the borrower during application.
Military members are able to borrow amounts as low as $500 up to $1000 based on the income they earn and the amount they have on their account. It would serve the borrowers well if they can keep a sufficient amount of funds in their bank account. By doing so, they would no longer need to submit some kind of security to the lender should they decide to borrow a higher amount in the future.