Alternative lenders such as payday and title lenders and pawnshops are under scrutiny by several city legislators around the country. There are those who say that these lenders provide a needed service and others who say that some lenders misrepresent the contract, charge exceptionally high interest, and make it almost impossible for borrowers to get out of debt. Some of the charges passed on to consumers are labeled as fees, rather than interest, so the charges are complex and may make the loan even more costly. Are these loans worth the costs, and how should these lenders be regulated?
Joining host, Dennis McCuistion, are:
- Anne Baddour: Senior Policy Analyst at Texas Appleseed
- Rob Norcross: Consumer Service Alliance of Texas
- Rev. Gerald Britt with City Square
Both payday and title loan lenders agree that consumers need to be better educated and make the choices that will allow them to be debt free.
This program explores why people go to payday lenders, the complexity of the issue and the legislation in question.
Join us as once again we talk about things that matter… with people who care.
Niki Nicastro McCuistion, CSP
Executive Producer/ Producer
Management Analyst, Speaker, Consultant
nikin@nikimccuistion.com
214-750-5157
***
2007 – 11.11.12
I just watched the program on payday lending and I have the following question:
Is the amount of the payday loan tied in any way to the amount of the borrower’s paycheck?
The example used was a $500 loan for two weeks.
If I wanted to obtain that loan, how much would my biweekly paycheck need to be? $500? $1000? $2000? Or could I just walk in there and borrow as much money as I wanted without being asked how much I made?
I would definitely not loan a friend or family member $500, repayable at $610 in two weeks, if I knew their biweekly take home pay was only $750 or $1000.
Are these loans being made in two-week increments with the lender knowing up front that the borrower couldn’t repay them in the first cycle?
I think that’s a very important issue that should have been brought into the discussion.
I entered into a payday loan for the amount of 1000.00 in January of 2012 due to an immediate hardship need we had at the time. Since then several other hardship circumstances arose and to date I have a balance of 240.00 including my fees after this loan was refinanced time and time again. it continually haunts me and This loan has been the worst thing I have ever done to myself, not once in the year I have spent in this cycle was I ever told I could obtain a payment plan due to my hardship circumstances, instead as I have paid this down, I have only been asked if i wanted to borrow more money!!! The amount of money I have paid in interest and fees is astronomical and could absolutely have been used in much better ways to help my family and I climb out of financial hardship faster than this service designed to keep us in debt. I whole heartedly agree that a cap needs to exist in our state to protect the consumer!!! What can the average person do to help support this effort of reform in our legislature and not just in Dallas? There should also be some form of accountability on the “store fronts” end to fully disclose options to the consumer, especially when their customer is stuck in this cycle after a certain length of time, instead of automatically refinancing the loan, and not limited to the day before the loan is due, it should be offered anytime during the loan. I am thankful for organizations such as City Square and Texas Appleseed looking out for public consumer interest. great program today, thanks for sharing.