Today I was going through my payday news alerts from Google when two things caught my attention. The first was the website below which at first glance seemed quite good until I was trying to get some text to go with the addition to the association section of the site. To my surprise the entire home page was one big image. So here is an oraganization looking to promote itself on the web and they have put a cloak of invisibility on the site.
What do I mean well... no search engines can index that, anyone looking to lift a quote for the same purposes as I likely used the original source like I did below. So here
BorrowSmart :The Council for Fair Lending launched the first Borrow Smart campaign in Alabama in 2007 (see story). The Alabama campaign included statewide television and radio commercials. The Council for Fair Lending was established in May of 2007 to enforce "accountability within the industry as well as a need to better educate Alabama residents and members of the media about the important services short term lenders provide to their customers."
Is the WSJ on Crack?
Payday loans ensnare customers in a cycle of debt that on average results in a borrower paying $800 in interest and principal for a $300 loan. ...
Does it happen I went through several months of data and yes... it happens occasionally but... that isnt... on average in fact it's actually the exception rather than the rule!
If that isn't the most moronic and totally biased piece of BS that I've read in the years of clipping this stuff I'll eat my morning constitutional. That is lame beyond just poor journalism. I seriously believe they are on crack over there! So what they are basically trying to get people to swallow is that on average people pay $800 interest on a $300 loan which is basically rolling a loan over every two weeks for about 3 months. Not to mention that in almost every state that would be an illegal apr! Yet they claim this is "on average"? Moronic... hey don't bogart the pipe boys!
Nobel prize-winning economist F.A. Hayek once observed, "Popular fallacies in economics frequently express themselves in unfounded prejudices against other occupations." Is this the reason for the contempt and vilification of Payday Lenders. I contend that the media have targeted the industry because it sells papers and ad space in some cases to those they vilify! Payday lenders are easy targets on a slow news day.
My suspicions are that all legislation or regulation really does is close stores further complicating an increasingly challenged job market. The 35% of using payday loans, cash advances, title loans and pawn shops do not have any less of a need for the service. The facts may be that in the current credit crunch this only serves to decrease the availability of credit . Jonathan Zinman of Dartmouth College recently released a study on how Oregon households fared after that state passed a cap on interest rates.
The study observes that most payday lenders left Oregon following the cap resulting in less payday borrowing. The study indicates that demand for such short-term loans did not cease because a law was passed. The study indicates that former payday loan borrowers turned to potentially more costly alternatives. Zinman sums that up with, "these results suggest that access to credit, even if expensive, can help some people make productive investments and help others manage their cash flows through emergencies."
In 2007, The Federal Reserve Bank of New York released a study on the effects of payday lending bans in Georgia and North Carolina. The research indicates that reducing the payday credit supply led to increased credit problems. The authors also agreed with Zinman as shown by the statement, "consistent with the hypothesis that payday credit is preferable to substitutes such as the bounced-check 'protection' sold by credit unions and banks or loans from pawnshops." summing it up best.
So the bottom line is when regulations are put in place the prey of the predatory lenders are just sent to another service that is more expensive! People loose jobs and consumers get the shaft! The problem with the press is they are quick to villify but have no clue that the need doesn't go away many people live paycheck to paycheck!
Welcome To the Payday Industry Blog!
I have been working in the industry for a little over 5 years at first as a PPC manager on a $1M account for an online service. That eventually was phased out as the service had gained over 10's of 000's of customer acquisitions over the period of 3 years. You can read about that Payday Loan PPC Campaign on my corporate site International Website Builders.
We decided to do this project to demonstrate the talents of the desme and IWB development teams portal development strengths and the fact there is literally no or very little information about these services. I (PayDay Guy) have been watching the uninformed villify this industry in complete ignorance of the services the lenders provide and out of a need to fill up columns on a slow news day. It is our hope we can inform borrowers and the public at the same time saving jobs and protecting consumers from even higher rates. Enjoy our blog and be sure to help out if you have the time by doing a lender review or commenting on the posts. Also be sure to check out the news clipping service.