News - Fast Payday Cash Loans
Lure of fast cash leads to triple-digit interest loans
Saturday, Jan 26, 2008
Payday loan stores say legislation would hurt 'little people'(This is the second of two articles being published this week on the issue of payday loans in the Sandpoint area.)
SANDPOINT -- The number of local payday loan outlets has grown 200 percent in the past five years, from three in 2003 to nine stores as of this month.
That's a substantial growth rate, but it pales in comparison to the annual percentage rate (APR) those stores charge for loans. At the going fee of $20 per $100 borrowed, the average payday loan can cost the borrower as much as 520 percent APR.
At present, Idaho requires only that these lenders be licensed -- a streamlined process that can allow them to start up a new shop in about a month. The state's Department of Finance monitors financial reporting after that point.
Beyond that, there are no restrictions on fees that can be attached to a payday loan and no limitations on how much interest can be charged.
The lack of such regulation leaves Idaho in a decided minority at the national level, where only eight states have not passed legislation that completely prohibits payday loans or places tighter caps on APR, additional fees and how frequently loans may be made to the same borrower.
This month, Sen. Shawn Keough, R-Sandpoint, and Rep. George Eskridge, R-Sandpoint, are working on draft legislation to further regulate the industry. Payday lenders say that any added regulation -- such as lowering APR or requiring a "cooling-off" period before another loan could be made -- could hurt their business.
"It would highly impact us, because a lot of people depend on us between pay periods," said Melissa Abeyta, branch manager at the Quik Cash store in Ponderay. "It would hurt the little people."
Source : http://www.bonnercountydailybee.com/
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