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The Crushing Burden of Paying for Payday

Some bills simply must be paid. So when the rent and the car payment come due but Tasnuva Ahmed's next paycheck is a week away and the wallet is empty, she visits her local payday lenders.

Zips up to the Check 'N Go on King Street in Alexandria, hurries inside and emerges 14 minutes later with a few hundred dollars, an advance on her next paycheck. Cost: $15 per $100 borrowed. Ouch.

Plus the interest she owes on loans from five other payday lending shops around town. Plus the interest on the last round of loans that she has rolled over because all her interest payments prevent her from paying off the principal on her loans. Mega-ouch.

"I owe $450 every two weeks," says Ahmed, a 27-year-old manager at a service company. "Sometimes this is your only option. I respect the fact that they're there when you need them. You have bills, and you have to pay them. But I have never recommended this to anyone. You can't catch up. I started with $100, and now I'm in so deep, this is my second-biggest expense. It's almost close to rent."

Virginia legislators are deep into their second year of debate over whether to tighten the rules governing the state's 790 payday loan shops -- or to squeeze them so hard they close up entirely. The District and three states have driven out the shops either by banning them or by capping their interest rate at 36 percent, as compared with the 391 percent they now charge. Maryland doesn't allow payday loans at all.

This is not as easy an issue as it might appear. Yes, the interest rates look exorbitant. But people who have lousy credit and cannot turn to banks -- many who have jobs and own homes but run short between paychecks -- need a source of money. They find themselves at the counter at Advance America, ACE Cash Express or Cash & Go, where they can get a two-week loan of up to $500.

About 430,000 Virginians borrowed from a payday shop last year, and nearly three-quarters of them took out more than a loan every month.

"These people know what they're doing," says Zainab Charley, the counter clerk at an Advance America on Leesburg Pike. "They're all adults. They know their own financial problems. If you want it, we can give it to you."

The way the industry sees it, they provide a service. You want it, pay for it. "I never say this is the right product for everybody in every situation," says Jamie Fulmer, spokesman for Advance America, which has opened 142 shops in Virginia since the state legalized payday lending in 2002. "But people don't want the government making that choice for them."

The industry and its supporters in Richmond -- payday lenders contributed $486,000 to legislators last year -- propose to save their business by limiting borrowers to two or three loans at a time and prohibiting customers from taking out a new loan until at least 24 hours after they've paid off their last one.

The industry argues that it is being singled out for criticism even though its companies' profit margins are about half that of big banks.

People who need quick cash face a variety of pricey options, industry advocates say, arguing that their 391 percent interest rate compares favorably with the cost of bank overdrafts, credit card late fees or bounced-check fees.

A staff report from the Federal Reserve Bank in New York last fall looked at the impact of shutting down payday lenders in Georgia and North Carolina and concluded that bounced checks, personal bankruptcies and complaints about debt collectors jumped significantly when consumers no longer had the payday loan option.

That's compelling evidence that some people cannot find good alternatives to payday loans, but options do exist, including credit unions and churches that are creating loan pools. I'm willing to accept the payday industry's argument that they cannot make a profit by charging much less than they do. But there's no natural right to profit off the pain of people in trouble.

And none of the industry's arguments hold a candle to the pain in the stories of every single borrower I talked to outside four shops in Alexandria -- the focus of the industry in Northern Virginia, with 16 locations -- and one in Fairfax. (I ran into quite a few D.C. residents who were borrowing in Virginia to pay off loans in the District, where payday companies stopped lending at the turn of the new year.)

"Banks won't talk to me because of my credit rating," says Rochelle, a federal worker who asked not to be named in full because she doesn't want her family to know how deeply she's fallen into debt. "So I need this, but I really hate that I have this option. I've been doing this for three years, and it's all negative. It becomes a cycle, and you just keep rolling."

After two years of regular visits to the lenders, Ahmed last week visited a credit counselor, who is helping to wean her from her $2,000 in payday debt. "Coming here is so easy," she says. "But let me tell you, this will just crush you. Find a friend, a relative, anything, but don't do this to yourself."

Please join me for the premiere of Raw Fisher Radio, a weekly face-off on the big stories in our region, on washingtonpost.com Tuesday at noon.

By Marc Fisher |  January 20, 2008; 7:34 AM ET
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Comments

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Not only should the state drive these people away, it should also encourage some sort of lending that does address the need, but without the predatory aspect. The problem with this business model is that the prey isn't just the person lent to, it's everyone else they're involved with financially.

Posted by: Nym, by the sea | January 20, 2008 10:52 AM

What right does the state have to tell adults how much debt they are allowed to take on? Assuming the payday lending customers are clearly informed of the terms of these loans, how can one suggest they are a bad thing? More regulation will shut these lenders down, meaning people like Ahmed and Rochelle will have NO way to get cash if they really need it (other than pitifully begging from friends and relatives).

Posted by: William | January 20, 2008 11:08 AM

You know, it's interesting that these Republicans who are defending the payday lenders are the same ones spouting off about their supposed "Christianity". You see, Marc, usury is completely, 100% un-Christian. Chritianity decries usury and does not tolerate it. Yet these supposed Christians tolerate it completely.

Marc, you need to do a better job pointing out this hypocrisy. This is part of your job as a columnist -- you must speak truth to power. I mean, seriously, if I had your job, I'd be using the columns all the time to point out hypocrisies among our elected leaders. I'd speak truth to power. I'd let them know that their abuses of their offices and their professed beliefs were not going to go unchallenged.

Do the same, for crying out loud!!!

Posted by: Ryan | January 20, 2008 11:17 AM

"Not only should the state drive these people away, it should also encourage some sort of lending that does address the need..."

OK. How do you propose the state "encourage some sort of lending that does address the need?"

"I mean, seriously, if I had your job, I'd be using the columns all the time to point out hypocrisies among our elected leaders."

You must be a new reader of the Post, chats, and this blog....

Posted by: BDWEsqTM | January 20, 2008 10:09 PM

I think it's reasonable for states to tighten up their usury laws a bit, since they most hurt the members of society who can afford the hurt the least. The idea of the state providing equivalent (but "fair") loans is really, really dumb, though - just establish conditions under which such loans are reasonable and let the private market do it.

Posted by: Lindemann | January 20, 2008 11:31 PM

"Find a friend, a relative, anything, but don't do this to yourself."

Aha! There's the answer...find some sucker to bail you out from your bad money management habits! And the best part is, you'll probably never pay him/her back! Then, when it all goes bad again (and it will), find sucker #2!

Welcome to America 2008...the entitlement mentality run amok.

Posted by: Anonymous | January 21, 2008 12:37 AM

These legalized loans sharks, to their shame and ours, always locate near military bases. Defend those who defend us -- get rid of these these bandits.

Posted by: Mike Licht | January 21, 2008 8:47 AM

Unfortunately, people learn by example and then become creatures of habit. The rich keep making the same decisions that made them rich, thereby making them even richer. The poor usually repeat the same decisions that led to poverty.

The price of credit is commensurate with the likelihood that the borrower will repay they loan. The sob-story above is a perfect example of why the housing market is in the toilet right now. If anything, these lenders should actually be charging MORE interest, not less. The subprime mortgage crisis is a perfect example of why the government should stay away from the silly notion of maximum interest rates, or lending controls. The government interference can only do two things: (1) create a crisis that spills over into the general economy, like the subprime fiasco, or (2) prevent people who are higher risk from having ANY opportunity to improve their credit. No smart business will lend to people when it can't protect itself from default, so it removes its capital from the higher-risk market and the market disappears.

Good credit isn't a right, but a reward for a history of wise decision-making. Bad credit is a punishment for a history of poor decision-making. If a customer makes another poor decision to use payday lending services when they are upside down financially, it is the customer at fault, not the service provider. Caveat emptor.

Posted by: Leesburger | January 21, 2008 5:00 PM

Last year at the general assembly thousands of letters submitted by customers in favor of being able to make a financial decision for themselves by receiving a payday loan were presented. I think the voices of the people that actually have a need for this service are the ones that should be making the decision. I am not only a long time employee of a payday lending company, but I have also been a customer and I'm a Christian. As a single parent, there have been times when I found myself short of cash and needed - not wanted - needed extra money and needed it right then. I'm sure at the time had Marc interviewed me coming out of a payday lenders, my story too, would have made for good writing material. However, I knew exactly how much I was going to have to pay back and when. I used the loan in a responsible manner and agree that some do not. We currently have state ran liquor stores. I'm sure some people drink responsibly and other visit the store on a regular basis. We all have a choice. I do not consider $15 an outrageous fee per $100. An outrageous fee is when the bank tries to insult our intelligence and say they put through the $200 check first because they thought it was more important and not because they knew by doing so that 3 other checks for $5 each would bounce and they could charge me $96 in NSF fees for them!! I am not and never have been one to look for hand outs. Even today as an active member of my church, I would not ask for a handout. I pride myself in taking care of myself and my family. At the end of the day, we do need responsible reform, what we don't need is the government making our financial decisions for us.

Posted by: Michele | January 21, 2008 5:04 PM

I was very disappointed that a reporter of Marc's caliber did not check his facts before writing his article.

Should there be reform in payday lending - yes. Should payday lending be put out of business - absolutely not.

As a single woman responsible for my own livlihood, I welcome every legal avenue available to me and am grateful for payday lenders should I need them.

Posted by: Marie Holland | January 21, 2008 5:40 PM

Why should the government determine how much I can borrow? If I choose to pay for a product knowing up front what the cost is, why shouldn't I be allowed to make my own decisions?
Payday Lenders fill a void that banks and other lenders are not willing to risk.
Without them many of us would be in worse trouble than we already are.
The current laws regulate payday lending and have been woking for years -- don't try to fix what isn't broken!

Posted by: Dave | January 21, 2008 7:55 PM

It's real interesting that the people complaining about payday lending have never used or never had the need for a payday loan. Not everyone is blessed to never be in a situation where they need some short term cash. For those that may need this service and use it responsibly...it's a good service. Cheaper than a bounced check and cheaper than a late payment on a credit card.

Posted by: Foster | January 22, 2008 10:38 AM

Payday loans are being used in this country because people NEED them. The banks will not fill this need, family and friends do not have the money to lend. Someone has to help people out.
Converting a Payday loan fee into an interest rate is unfair. Convert a NSF fee from a bank $35.00 on a $5.00 check and it is much higher than any payday loan.
Personal responsibility is what we are talking about here and the government cannot be responsible for every aspect of people's lives.

Posted by: Chris | January 22, 2008 10:41 AM

What alternative is available to those who currently use these short-term loans? $15 per $100 is not an unreasonable fee particularly in light of the greater risk that the lender undertakes when making the loan.

Posted by: Bridgette | January 22, 2008 11:03 AM

A little more reality and a little less sizzle please. Virginia law does not allow rollovers, there is no "interest" charged on payday loans and, while I doubt that the payday loan companies want all of their customers to do so, if they can't make the payment on time, there are payment plans available. At NO extra charge. If the government decides people should not have this option, what's the next step? People should not purchase items that they can't afford. Does the government have the right to tell you what you can or can't afford? As adults, this is a decision we all have to make for ourselves.

Posted by: Catherine | January 22, 2008 11:09 AM

Its easy to look at percentages. At 36% the fee per $100 is equal to $1.38. When payday lenders are out of business who will be lending to the people that face a $30 overdraft fee when they bounce a check when overdrawn by $1. Maybe Marc will lend them money?

Posted by: Doug | January 22, 2008 11:11 AM

Isn't it true that competition drives prices down? So, the logic here is that by banning payday loans...consumers win. That makes absolutely no sense.

The fact is people use payday loans when they have to pay a bill today...but don't want to get hit with a bounced check or overdraft charge or a late fee. So, by banning payday loans you are just forcing people into the options they had been trying to avoid in the first place. I'd say that's a losing situation for consumers.

Posted by: Lynz | January 22, 2008 11:33 AM

What happened to letting people make their own, informed decisions? As long as you are able to get all the information about what you are buying, it should be up to the individual to decide - not the government. First payday and then what next?

Posted by: Kyle | January 22, 2008 11:56 AM

I believe that business such as Payday lenders are essential. Banks won't loan to individuals with poor to no credit. People would lose more money selling something at the pawn shop to make ends meet. If you take a business like this away from the people then it will hurt the economy and the people.

Posted by: jason | January 22, 2008 12:23 PM

Opponents of payday lending say that consumers with bad credit can get comparable loans from churches and credit unions.
I have yet to find a credit union that will do a short term, low dollar loan or find a church that will make a loan at all.
Besides, you have to belong to the credit union or church, according to those who advocate such a plan. These are not emergency solutions.
Reforming payday lending in Virginia through a responsible reform bill is a good thing. But if the General Assembly puts a cap on payday lending, it kills the industry and makes life miserable for those who don't have any other credit choices when they face emergency financial situations.

Posted by: John | January 22, 2008 12:23 PM

Why is everyone so willing to let the government decide every single thing they can/cant do? I would much rather pay $15 per $100 than face the overdraft fee wrath of my bank (which is perfectly legal and much more than $15!!)

Posted by: Ted | January 22, 2008 12:43 PM

While you're at it stop banks and businesses from charging overdraft fees for bounced checks. I bounced a check once and it cost me over $75.00 plus the amount of the check ($30). Looking at it this way; If I know I don't have any money but they are going to cut off my water if I don't pay TODAY I have a choice: Write a check that is going to bounce and incur a $75 charge from the business and the bank OR get a loan for $100 from a cash advance and it will only cost me $15.00. Who to pay ain't for you to decide. I'm paying the person that's going to charge me the least. You must be in the banks and business pockets.

Posted by: Don | January 22, 2008 12:48 PM

Like it or not, there is a big need for payday lending and statistics so the need. Unfortunately, not everyone is blessed to have family and/or friends to turn to when cash is tight. For those who need this service and use it responsibly...it's a very good service. It is much cheaper than a bounced check and late payment fees on credit cards.


Posted by: Mark | January 22, 2008 12:50 PM

We as a public are smarter than we are given credit for. Whether or not you use this service you should always have the freedom to choose.

The other thing is what ever happened to owning up to your obligations and not blaming your situation on someone else??? Radical concept, I know, but that means you actually have to look in the mirror and be honest. Is the payday loan really the problem or the poor financial decisions you make prior to it the real issue??? Maybe time to grow up?!

Posted by: Eric | January 22, 2008 1:09 PM

Research shows that - by providing credit where otherwise there would be none, short-term, small-dollar ("payday") loans actually HELP the households they serve. Another study found that bans on such loans in GA and NC hurt consumers by eliminating a credit option, INCREASING costs to consumers and also increasing bounced checks and complaints about credit collectors...Antipayday loan sentiment is driven by credit unions and banks, who stand to benefit banning the industry...

Posted by: TLeonard | January 22, 2008 1:16 PM

I believe it's insulting and degrading to categorize people who rely on the services provided by payday lenders as incapable of making sound financial decisions.

Many US banks are seeking high interest rate foreign investments to cover mismanagement and unsound business practices. The costs of these loans will ultimately be passed on to consumers in higher interest rates and fees. Their mistakes cost all consumers.

Why is it if you need to borrow $500 to meet an emergency expense you are identified as ignorant of sound fiscal practices? However, if you need to borrow $9 billion to cover losses from risky practices its just business as usual.

If the government feels the need to be involved in financial matters, focus on important items I mean how many people have lost their homes through borrowing a $500 payroll advance?

Posted by: Lou N | January 22, 2008 1:29 PM

Fee's for payday loans are less expensive that a bounched check. A bounched check will cost you a less $30.00 per check. A payday loan of $100 will cost you $15.00. How is a bounched check less expensive than a payday loan?

Posted by: Emily | January 22, 2008 1:30 PM

This is America, where citizens have choice. To suggest that Payday Loan companies place a cap on the value of their product is vacuous, to say the very least. Are we placing a cap on any tangible items? No. I guess that's how someone can justify a $100.00 pair of cotton jeans.

Posted by: Allan | January 22, 2008 1:43 PM

"That's compelling evidence that some people cannot find good alternatives to payday loans, but options do exist, including credit unions and churches that are creating loan pools. I'm willing to accept the payday industry's argument that they cannot make a profit by charging much less than they do. But there's no natural right to profit off the pain of people in trouble."

If people don't have a right to profit off the pain of people in trouble then I guess we should stop paying all the doctors. And all the car mechanics.

Heck, let's just quit paying everybody who provides services to someone in need.

Posted by: Josh | January 22, 2008 1:46 PM

The last thing I want is the government to be involved in this. The federal debt is $9 trillion. Who thinks that the government will do a decent job of this. Why are people afraid of personal responsibility?

Posted by: David | January 22, 2008 2:01 PM

I'm so tired of the government, media outlets and certain "consumer groups" trying to make my decisions for me in regards to payday loans. The payday loan industry is just another industry folks! They exist because there is a need for them in our society. In fact, as an industry they have tried to make the industry more consumer friendly. They offer credit improvement services, optional payment plans and will work with customers. There are a lot more industries out there who aren't as considerate of the consumer (credit card companies and banks).

Face it, our economy is spiraling out of control but we still have obligations to our families to provide for them. I, for one, am happy to know that the payday loan industry exists for me in difficult times. A $15.00 fee is nothing in comparison to the emergency I need the money for in a difficult hour. Used wisely, payday loans are meant to be a helping hand. If the fees become a crushing burden, then you are abusing the service and living way beyond your means.

Posted by: M. | January 22, 2008 2:04 PM

Marc, when will you and every other Payday Loan hater in this country realize that if someone has 6 Payday loans out at the same time, the problem is with the borrower, not the lender. There is a Center for Responsible Lending, but not a Center for Responsible Borrowing. Why don't you put some effort into educating people on how to borrow money responsibly instead of limiting their options.


Here's a scenario: Your power bill is $100 more than you can afford and it's over due. It's Tuesday and if you don't pay it by 5:00pm today it gets cut off for 3 days until you get paid on Friday.

Your choices?
a: Let your power get cut off for 3 days and pay a $40 reconnect fee (total $40 in fees, not to mention no power for 3 days).

b: Write a check that will bounce, pay your bank $25 for Non-Sufficient Funds AND pay the power company $25 returned check fee (total $50 in fees).

c: Borrow $100 from a Payday Lender for $15 fee and keep your power (total $15 in fees).

Pretty easy decision I think. But it all comes down to the viewpoint of who's writing the article: The people with cushy jobs that make more than they know how to spend versus the people who work 3 jobs and still can't pay their necessity bills.

Why don't you attack the Banks and Credit Card companies that charge $25 late fees and $25 over-the-limit fees per month on credit cards. Lets not forget $25 for your first returned check, $30 for the 2nd, $35 for the third and so on. Banks rip people off left and right and no one ever complains publicly about them like your type do against the Payday Lending. I personally have quite a few horror stories about a particular bank in the southeastern region that's stolen more fees from me than I care to admit and when you bring it to their attention they do nothing to rectify the situation.

Posted by: Mike | January 22, 2008 2:07 PM

If 430,000 people in the state have used the service, it is obviously a needed service. Banks used to offer small loans, but they quit because they are unprofitable. Who else is going to fill this need? Credit Unions, churches, family, and friends are all nice sounding alternatives, but they are not realistic, or that is what people would be doing in the first place. You take this option away, and what do you have left? You have illegal, back-alley loans with unknown consequences, or you resort to stealing and theft to make ends meet. Great alternatives that you want to leave 430,000 people with.

Posted by: Steve | January 22, 2008 2:09 PM

When it comes to money, as in anything else, there are likely to be some individuals that cannot or won't control their own behaviors. The media zooms in on those individuals, for what, human interest?, no, it sells. There is no shame anymore for lack of self discipline, the government is supposed to solve everything. Do we want to subscribe to socialism because a few cannot behave? Take away this, take away that...where does the line finally get drawn? Quit legislating everything to death for the few, so you can affect the many. Leave payday loans alone, it provides an option for those who genuinely need it.

Posted by: Candy | January 22, 2008 2:09 PM

I am an intelligent, educated adult. Why do I need "Big Brother" narrowing my financial options? I am pleased that some in this nation do not need occasional financial help but the reality is Payday Lending is popular because many, many Americans do. They provide a service that no one else does. Why don't the banks provide short term, 36% loans for $100? Because no one can and stay in business. You don't expect banks to loan for $1.38, why should companies who are willing to take the financial risk do so?

It shouldn't be about what hot, sexy bandwagon the politicians can jump on, it should be about what the American people want. Payday Lending is popular because it is needed. I would prefer Big Brother attend to his own finances and get out of mine.

Posted by: PH | January 22, 2008 2:17 PM

The banks are charging $35 for a $2 overdraft, and $2 or more to withdraw $20 from their ATM (remember how ATMs were supposed to reduce the cost of transactions by eliminating the need for a human being??) And payday lenders are the bad guys? Think about it, for that $15 fee, the payday lender has to pay their employee, provide benefits to that employee, pay the rent, keep the lights on, cover the debt from unpaid loans, and so on. The bank gets their $35 by electronically debiting the customer's account with zero human intervention and no real overhead. Payday lender prominently advertise their fees. Banks hide their fees in the fine print, and then do "creative" accounting to maximize their profits like clearing the largest item first and allowing 10 small items to overdraft the account, each with a large fee. Could be 1 fee, but the bank CHOOSES to charge 10 fees! People know what they are paying when they walk into a payday lender, and need to be able to make their own financial decisions.

Posted by: Brian | January 22, 2008 2:21 PM

I believe that everyone should be able to make their own financial decisions. Last time I checked this was a free country. With the laws already in place to protect the consumer, they can make decisions for themselves. Isn't it really their own fault if they continue in a cycle of debt?

The real need is to educate people on financial responsibility; and some of the payday advance companies are doing this. Advance America has an entire section of their site dedicated to this.

Posted by: Alex | January 22, 2008 4:51 PM

The crushing burden of payday lenders? Let us meditate on the $15 per $100 fee that you refer to as "Ouch." I did a quick comparison to a credit card payoff and a home mortgage. If you take a credit card with a balance of $3000 and a 16% APR and made the minimum payment until it was paid off. You would pay more than $35 per $100. Better yet, a $140,000 mortgage on a house for 30 years @ 6.5% interest comes out to an outstanding $198 per $100. Now that is a Cold Splash of Reality, With A Side of Sizzle.

Posted by: Drew | January 22, 2008 5:10 PM

If you want to protect the consumer and if you feel it is necessary for the government to do this protecting, go after the banks first. Banks are making millions, if not billions, of dollars charging fees to these same consumers you propose to protect. Is it their right to process debits and credits in the order that will generate the greatest amount of fees for them as opposed to processing them in the order that will help their customers?

Secondly, go after the oil companies who change the price of a gallon of gas based on what? It sure isn't based on the cost of their product in the ground? Need an example?

There are much larger issues for our government to concern themselves with other than payday lending.

Freedom also means free choice.

Posted by: Jon | January 22, 2008 7:59 PM

What the reporter seems to miss here is the REAL issue surrounding the cash advance industry: The existence of payday loans isn't the problem, it's the fact that a distressed consumer can take out multiple loans with multiple cash advance companies.

A cap on the APR is a lazy, uninformed, irrational, and yes--simpleton solution to the issue. All that does is put the industry out of business, and take away what amounts to one of few resources that millions of deserving Americans have to short-term financial relief. Traditional means available to wealthier counterparts won't even give them the time of day, except in the form of late fees and penalties, which in the end, appear to cost them even more. Where do we expect them to turn? "Friends and family?" Yeah, that's it--"You people" should turn to your friends and family.

Easy for those of us carrying a network of family and friends with the financial means to help us in a jam. Nice thought; even better soundbite. But let's face it--still not a reality for many in America.

Instead, our lawmakers should truly try to understand the economics and challenges of this issue rather than pander to their constituencies, falling prey to the "soundbites of suffering" that lead to emotional, uninformed opinions of how to deal with a very complex issue.

Focus on the real problem--eliminating multiple loans out at the same time. But you can't count on the lenders to do this. Why? Because under the current system, all they can do is ask the customer if they have a loan out at another lender. What do you think the customer is going to tell them? That's right; whatever it takes to get the money they need, be damned of the consequences. And that's not a judgemental comment. Bottomline, if I--and I bet each of you reading this as well--found yourself in a similar situation, you'd do whatever it takes within the law, and would worry about dealing with it later. And right now, under the law, you could get as many loans as you wanted from as many lenders you could find.

Yes, I'm sure there are plenty of lenders unconcerned with the truthfulness of a customer's response as to whether they have existing loans with others. But on the flip side of that coin, I have to believe there are also lenders that would NEVER put that consumer in jeopardy on purpose. Do we REALLY believe that all payday lenders are evil?

Some states have databases. How come every state, or even national lawmakers, aren't pursuing this type of oversight as the solution? Keeps the majority from suffering from the misuse of a few customers and a few unscrupulous lenders.

Let's stop trying to determine what's right for others, and instead, help make what they want and need, better. In the case of cash advances, I bet if we examine the real issues here, we can come up with solutions that eradicate both irresponsible lending AND irresponsible borrowing.

Posted by: Roger B. | January 23, 2008 12:54 AM

Payday lending is a fee-based service which compares favorably in transaction costs to credit card advance fees/interest rates. This type of loan represents a safe vehicle of access to consumers where the lender produces an unsecured loan that commercial banks and other financial institutions are unwilling to offer. We must recognize that payday lenders assume high default risk due to the unsecured nature of the loan. The lending vehicle provides for a convenient, consumer friendly access to short-term cash. Choice is always good for consumers. Without payday loans a tremendous void exists in the market.

Posted by: George | January 23, 2008 10:12 AM

First of all, when Tasnuva Ahmed and Rochelle went into these stores to get a loan, they knew how much they had to pay back and when it was due back. So, they have no right trying to blame the stores with any of this mess. It's ALL their fault for being such irresponsible people in the first place.

They did NOT use the stores wisely and responsibly. Seems to me like they are just like a million other irresponsible people in the world who do NOT pay their bills on time.

So, the blame needs to be put where it belongs!

People like this give the payday lending industry a bad name. If it wasn't for people like these then there would not be a problem with these stores in the first place.

Posted by: Anonymous | March 18, 2008 5:16 PM

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