"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi

Making a Big Pay Day off of Pay Day Loan Companies?

May 12th, 2020 by editor · No Comments

Source: Amy Livingston

What do St Louis City, Kansas City, Springfield and Liberty all have in common?  They all have annual licensing fees ranging from $1,000 to $5,000 on “short-term lending establishments”.  Interestingly enough on the same day that the Springfield City Council voted to start imposing the fees Curtis Trent (R – Springfield) added language to a bank bill stating

“local governments are not allowed to impose fees on “traditional installment loan lenders” if the fees are not required of other financial institutions regulated by the state, including chartered banks.”

While Trent states this was not intended to protect Pay Day Loan companies specifically and “traditional installment loan lenders” are different.  Advocates for the ordinance say

“that while a payday loan wouldn’t normally count as a “traditional installment loan,” many payday lending institutions also have a traditional installment loan license. Rather than being two separate businesses, the multiple licenses could allow such a lender to claim the fee imposed because of their payday loans is disallowed by Trent’s measure since they are also a traditional installment loan lender.”

Brian Fogle, the CEO of the Community Foundation of the Ozarks and a co-chair of a Springfield city committee appointed to study payday loans stated

“A lot of these payday lenders are shifting to this type of product,” he said.

Unlike payday loans, which must be less than $500 and are supposed to be paid back within weeks, installment loans can be larger and are paid back over four or more months. They can still carry triple-digit annual interest and create similar problems for borrowers, though.

He allowed that expanding those offerings could have some positive effect for consumers because the loans are paid off gradually.”

Hmmmm…..maybe they aren’t as bad as we thought.

In the meanwhile Crystal Quade (D-Springfield) the House Minority Leader stated

“People use the payday lending industry when they are in desperation and obviously, there’s a lot of that right now,” she said. “This will be harmful.”

So is it better that people are desperate just don’t get the money they need?

Their wish to shut the Pay Day Loan companies down may still come true as at least Payday Money Centers is suing for access to the small business lending program.  In fact the pay day lending industry states that it is being unfairly excluded from the small-business lending program.  Congressman Blaine Luetkemeyer (R-MO) was one of the authors of a letter to Secretary Mnuchin and Administrator Carranza pleading their case.  Surprised Bought & Sold Lacy Clay didn’t sign on.

 

Related:

Rep. Cleaver Investigates Firm Tied To Rep. Clay’s Favorite (Pay Day Loan) Industry

National Media Follows Up On MO Blogger’s Expose of Rep. Clay & Loan Sharks

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Tags: MO Legislature · Rep. Lacy Clay

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