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Home JackpineRadical Rooms The Wizard Room Overhaul in store for payday loan industry if bill passes

  • Omaha Steve (985 posts)
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    Overhaul in store for payday loan industry if bill passes

    By Cole Epley / World-Herald Bureau 5 hrs ago

    LINCOLN — Glenda Wood said she had no way of knowing the $500 postdated check she cut to get her hands on a payday loan in 2006 would take nearly a decade to get out from under.

    First came the new set of tires. Then some unexpected home repairs. After that, medical bills — also unexpected.

    On top of routine household expenses and student loan payments, Wood said the “payday loan trap” ensnared her and her family, and so the married mother of three took to the Nebraska Legislature’s Banking, Commerce and Insurance committee on Tuesday to support a proposal that would reduce the effective interest rate on such loans by an order of magnitude and stretch out the repayment period.
    “We estimate we spent close to $10,000 paying back that original loan” for new tires, Wood said Tuesday, saying they took out small loan after small loan. “We felt exploited, trapped, powerless and unable to find a way out of the cycle.”

    FULL story: http://www.omaha.com/news/legislature/overhaul-in-store-for-payday-loan-industry-if-bill-passes/article_8f00eb0c-4a6f-5a75-99ba-8aa5c5dc1c45.html

    PADemD, 7wo7rees, HeartoftheMidwest and 3 others4Sibes, Bearian, beemerphill like this
    "P.S. please if you get a chanse put some flowrs on Algernons grave in the bak yard.": Flowers for Algernon

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7 replies
  • beemerphill (102 posts)
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    1. This industry Needs reform.

    Payday loans, title loans, and similar schemes are nothing more than a way for vultures to take advantage of the most vulnerable members of our society. Most of these “businesses” are actually owned by people who are so ashamed of what they are doing that they hide behind trusts, LLCs, and shell games of one corporation owned by another so deep that we will never know who actually owns them. They have enough money to buy crooked politicians to make their theft legal. There should be NO interest in the United States that exceeds 18% APR. Even that is excessive considering that your savings account at the bank probably pays you only 1%. It is time that the practices of these vultures be made public, and the real owners be named so that the community can see who is doing this.

    • HeartoftheMidwest (123 posts)
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      2. " They have enough money to buy crooked politicians…"

      Debbie Wasserman Schultz.

    • FanBoy (6340 posts)
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      4. many of these businesses are actually owned by the banking industry.

      shame has nothing to do with anything.

      http://npa-us.org/research/payday-lending

      The major banks funding payday lending include Wells Fargo, Bank of America, US Bank, JP Morgan Bank, and National City (PNC Financial Services Group).

      All together, the major banks directly finance the loans and operations of (at minimum) 38% of the entire payday lending industry, based on store locations.

      The major banks indirectly fund approximately 450,000 payday loans per year totaling $16.4 Billion in short-term payday loans.
      Wells Fargo is a major financier of payday lending and is involved with financing companies that operate one third (32%) of the entire payday lending industry, based on store locations.

      All of these above mentioned banks received TARP bailout funds in 2008-09 and have benefited from accessing capital at exceptionally low interest rates from the Federal Reserve.

      Major banks access credit from the Federal Reserve at 0.5% or less, these banks extend an estimated $1.5 Billion annually to eight major payday lending companies, who in turn use this credit to issue millions of payday loans to consumers every year at average rates of 400% APR.

  • StupidRedhead (2248 posts)
    Profile photo of StupidRedhead Banned

    3. I hope they're put out of business

    everytime I see a person walk into one, I cringe for them. Ive instructed my kids (in their 20’s) and their friends to never use them,

    948c8f248a
    • hollys mom (536 posts)
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      5. we need to get banking in the post office!

      • StupidRedhead (2248 posts)
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        6. Yes we do and I wish Bernie would keep pursuing it.

        948c8f248a
        • hollys mom (536 posts)
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          7. my brother used to use check cashing places

          I never said I had the smartest brothers. I have no idea why. anyway, he and his wife lost all possibility of getting a checking account in nj when they both passed bounced checks because 1. they never balanced their check book and 2. they were always spending more than they had because they didn’t like to think about it, I know they both stole money from my purse, Ihad to keep it in sight visiting them.

          So anyway, my mother created a special checking account where my brother could deposit his check and get the same amount out the same day – no fees, but other than cashing checks he had no access to that account, when my mother died, I closed that account and my brother accused me of stealing his money. I just did not want to have to keep  an eye on him with my personal busy life and figured surely he learned how to cash checks, but I was wrong, a 48 year old man could still not have a checking account and he went back to these cashers, he died as he lived in deep debt.  I had to donate to the estate to not have all assets seized  while the kids lived there.  It is not that hard, he could do complex chemical equations but not balance a check book. still angry over this.