Consumer Alert: Payday Loans Gouge Customers
You've probably heard the ads on TV or radio, promising you
to help you out of a temporary cash shortage.
"Payday loans" are a form of cash advance offered by some check-cashing services which
have grown in recent years.
But the charges for these services, calculated as an annual percentage rate, can
be exorbitant... and it's not uncommon for customers to find themselves
renewing the cash advance every pay period.
Check Penn State's
Consumer Issues
for a description of how these services operate.
These short-term loans can look like a good deal to someone who
would otherwise pay bounced-check fees or late charges on rent,
but the real lure may be the ease with which they're obtained.
Once upon a time, finance companies would provide loans at the
legal limit under state usury laws, typically about 36%.
While many people thought this rate was usurious,
the payday loan industry has succeeded in changing the laws so
that they can charge an APR which is many times this.
But obtaining a payday loan isn't only a very expensive way
to borrow, it keeps the borrower from building a good credit
history which would eventually make it possible to get a loan
from a credit union or other financial institution at much
more reasonable rates
Commentaries on Payday Loans
Cashing in on New Mexico's Poor
Whose Payday Do They Care About?
(Wilmington, NC Star, 8/31/2001)
[Wayback archive]
End the Treadmill of Payday Lending
(Charlotte Business Journal, 8/20/2001)
Quick Facts About Payday Loans
(Alabama Arise, 7/20/2001)
Preying on Payday
(Mother Jones, 5/1/2001)
[Wayback archive]
Payday Loans: The High Cost of Borrowing Against Your Paycheck
(Army Lawyer, 2/2001)
Army lawyers suggest that some payday loans may be
a violation of the federal RICO law.
Payday Loan is a Costly Option for Quick Money
(University of Illinois Extension, 2/7/2001)
[Wayback archive]
A Few Bucks Until Payday
(Governing, 12/2000)
[Wayback archive]
Payday Loans
(KWTV Common Cents, 5/19/2000)
[Wayback archive]
Alabama Must Not Legalize Loan Sharks
(Media Forum, 4/20/2000)
Shylock 2000
(LA Weekly, 2/18/2000)
Exploiting the Law
(Cincinnati Post, 2/10/2000)
Payday Loans Can Be Deep Trap
(Cincinnati Post, 2/2/2000)
More Payday Loan Abuses Uncovered
(Cincinnati Post, 2/1/2000)
Payday Loan Reforms
(Cincinnati Post, 1/28/2000)
Indiana Targets Payday Loans
(Cincinnati Post, 1/27/2000)
Payday Loans Need Rules
(Enquirer.com, 1/26/2000)
Protecting Consumers
(Kentucky Post, 1/25/2000)
Payday Lenders Promise Reforms
(Cincinnati Post, 1/24/2000)
Payday Loans Trap for Poor
(Cincinnati Post, 12/16/1999)
Payday Loans' High Interest Adds Misery
(Enquirer.com, 11/19/1999)
Fact Sheet on Payday Loans
(Consumers Union, 11/1999)
Debt Machine: Payday loans rip off the poor
(San Francisco Bay Guardian, 9/1/1999)
Payday Loans Prey on the Poor
(National Center on Poverty Law rebuttal to 8/13/1999 Chicago Tribune editorial)
[Wayback archive]
Growth of Payday Loan Industry Explodes
(Cincinnati Post, 6/21/1999)
Owner Says Stores Fill a Need
(Cincinnati Post, 6/21/1999)
The Money Trap
(Cincinnati Post, 6/19/1999)
Indiana Lenders Plentiful
(Cincinnati Post, 6/19/1999)
Payday Loans Criticized by Debt Counseling Group
(Enquirer.com, 12/14/1998)
Payday Lenders Push to Legitimize Exorbitant Interest Rates
(National Consumer Law Center, Fall 1998)
[Wayback archive]
Industry Propaganda
More Stories About Check Cashing & Payday Loan Services
Cash-Advance Businesses Advised to Do Business a Different Way
(Indiana Star Press, 9/9/2001)
AG Gets Favorable Verdict in Payday Loan Scam
(Texas Attorney General, 10/31/2000)
[Wayback archive]
Payday Lenders Cash In On Loophole
(Gainesville Sun, 6/11/2000)
[Wayback archive]
Loan-Shark Charge Shuts a Boston Mailboxes Etc.
(APB News, 4/21/2000)
Payday Can Carry High Price
(Raleigh News & Observer , 2/2/2000, text not available)
Texas Announces $1 Million Settlement with Payday Lender
(Texas Attorney General, 12/17/1999)
[Wayback archive]
Texas Cracks Down on Payday Lenders
(Texas Attorney General, 9/21/1999)
[Wayback archive]
Texas AG Sues Payday Lenders
(Capitol Times, 5/13/1999, text not available)
Texas Files Suit Against Payday Lenders
(Texas Attorney General, 5/12/1999)
[Wayback archive]
Payday Loans Present Opportunity to Oppose Usury
(California Bankers Assocation, 5/1999)
[Wayback archive]
Payday Loans
(KRON Contact 4, 3/1/1999)
[Wayback archive]
Borrowing Against Paycheck on Rise
(Raleigh News & Observer , 12/24/1998, text not available)
Alternatives to Payday Loans
(Bank Rate Monitor, 12/15/1998)
Payday Loans -- An Expensive Choice for Borrowers with No Options
(Bank Rate Monitor, 12/15/1998)
Some Business Evading State Law Banning Loans
(Augusta Chronicle, 11/10/1998)
[Wayback archive]
Payday Loans Called "Loan Sharking"
(spokane.net, 11/11/1998, text not available)
Ace Cash Express Expands Operations Within Wal-Mart
(5/18/1998)
Check-Cashing Inspections Begin
(Lexington Herald-Leader , 4/29/1998)
[Wayback archive]
Check Cashing Bill Headed to Governor
(Jackson, MS Sun Herald Online , 4/2/1998, text not available)
City Seeks Oversight of Check Cashing
(Washington, DC Business Journal , 3/30/1998)
Check-Cashing Services Take Bite Out of Wages
(Business Journal of Phoenix , 3/9/1998)
Pennsylvania Puts Lid on High Check-Cashing Fees
(bankrate.com , 2/27/1998)
For Some, Paydays Come Sooner Thanks to Loans
(Everett, WA Daily Herald , 2/20/1998)
[Wayback archive]
Officials Call Payday Financing Loan Sharking
(Bank Rate Monitor, 2/17/1998)
Panel OKs Stiffer Rules on Check-Cashing Firms
(Lexington Herald-Leader , 1/30/1998)
[Wayback archive]
Banking on the Edge
(Seattle Times , 1/26/1998)
[Wayback archive]
Lawmaker Urges Limit on Check Cashers
(Lexington Herald-Leader , 10/26/1997)
[Wayback archive]
Bill Would Limit Check Cashers
(Lexington Herald-Leader , 10/22/1997)
[Wayback archive]
Fees currently unrestricted
Editorial: No More Blank Checks
(Lexington Herald-Leader , 10/21/1997)
[Wayback archive]
Check-cashing, cash-deferral services need regulation
Check Cashers Unchecked
(Lexington Herald-Leader , 10/19/1997)
[Wayback archive]
Firms offer ready cash, charge clients dearly
Student Borrows Hundreds and Pays Back Thousands
(Lexington Herald-Leader , 10/19/1997)
[Wayback archive]
Check Cashing Outlets Take a Big Bite
(Pittsburgh Business Times , 10/19/1997)
Profits are being made in poor neighborhoods
Kentucky Sues Lending Company
(Lexington Herald-Leader , 9/27/1997)
[Wayback archive]
Annual 264% charges cited
Pay Dirt
(Business Journal of Milwaukee , 9/22/1997)
Few Regulations Let Check Cashers Charge Huge Sums
Regulations Could Cap Check Cashing Fees
(Triangle Business Journal , 9/1/1997)
Consumer Group Pushes for Regulation of Check Cashing Industry
(Houston Business Journal , 9/1/1997)
Survey Shows Check Cashers Are Cashing In
(Florida Times-Union , 8/26/1997)
Low-income Americans being hit by high fees
Consumer Group Blasts Check Cashers
(Amarillo Globe-News , 8/22/1997)
Easy Money in Hard Times
(Memphis Flyer , 8/18/1997)
Check-Cashing Fees Limited Under Bill
(Raleigh News & Observer , 8/11/1997, text not available)
General Assembly approves measure to protect people without bank accounts
Banking in the Hood
(Greensheet , 6/3/1997)
[Wayback archive]
Retailers Cashing in on Consumers' Need for Quick Money
(San Francisco Business Times , 6/2/1997)
Shadow Banks Give Quick But Costly Fix to Money Needs
(Daytona Beach, FL News-Journal , 5/18/1997)
[Wayback archive]
Discusses payday loans, pawn shops.
Company Cashes in on Payday Loan Boom
(Cincinnati Business Courier , 5/5/1997)
Check-Cashing Industry May Face a Bleak Future
(US News , 4/14/1997)
[Newsbank preview]
Fringe Banking: Check-Cashing Outlets, Pawnshops, and the Poor
(John Caskey, 2/25/1996)
book abstract
Florida Pawnbroking: An Industry in Transition
(Florida Law Review, 1996)
Personal Views
Legislation Update
Bibliographies and Surveys
Payday Lending Services
The businesses listed below are all believed to engage
in usury by offering "payday loans". Consumers
are advised to avoid the businesses listed below
and any other businesses offering usurious loans.
Are there any good payday lenders? Not that we know of.
If you know of one, please let us know.
Aafordable Services , Mission Viejo, CA
Access Auto Funding
(dba ezcashnow ),
Van Nuys, CA
Ace Cash Express
Advance Financial Group
(dba AmeriCash Advance ),
Tulsa, OK
Bell Financial Services
(dba payadvance.com ),
Los Angeles, CA
Cash Advance Now ,
New Orleans, LA
Cash Now
(dba 200cashnow ),
Carlsbad, CA (down as of 10/10/2001)
Cash Quick Payday Loans ,
Indianapolis, IN (down as of 10/10/2001)
Charlie Checks , Warsaw, IN (down as of 10/10/2001)
Check 2 Cash , Sunnyvale/Hayward, CA (down as of 10/10/2001)
Diversified Services
(dba Cash Reserve ),
Chesapeake, VA
Dollar Financial Group
(dba CashTilPayday,
Check Mart, Money Mart, Loan Mart, Chex$Cashed, ABC Check Cashing, QwiCash,
Almost-A-Banc, AnyKind Check Cashing, C&C Check Cashing, Cash-N-Dash),
Berwyn, PA
Fast Bucks , Dallas, TX
(retail outlets in NM, TX)
Goldx Financial , Los Angeles, CA
Mr. Cash Advance
(online advances -- out of business as of 1/20/2000)
MyPaydayLoan
Pawn Plus , Martinsville, IN
Payday Advances , Boise, ID
(www.wiretome.com)
Payday Express , Sandy, UT
Payday Express , Whittier, CA
Payday Loan Corporation , Orange, CA
(serving residents of CA, NV, UT)
Personal Finance Corporation , Tuxedo Park, NY
(Paul Fischer, payday911.com)
(down as of 10/10/2001)
Quik Payday , Logan, Utah
(online advances -- available throughout U.S.)
T & W Payday Loans , Lawrence, KS
U Cash Payday ,
South Bend, IN
University Cash
(dba NationalPayday.com ),
Gainesville, FL
Un Préstamo de Dinero ,
Springville, Utah
Venture Services
(dba Check Advance ),
Chattanooga, TN
(retail outlets in KY, MS, OH, TN, WI)
VIP Cash ,
Glendale, CA
WebFastCash , Carson City, NC
WorldCashNow , Bexley, OH (serving FL & OH)
YourCashBank , Salt Lake City, UT
ZippyCheck ™, Reno, NV
ZippyCheck™ drops its threat
to file fraud charges against borrowers who fail to repay a loan.
Indiana Licensed Payday Lenders
Financial Services page