Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : Arkansas payday loans come under heavy fire

« Visa and MasterCard are working together to improve credit card security | Main | 226,000 Ameriprise Financial customers and employees have been at risk of computer identity theft »

January 18, 2006

Arkansas payday loans come under heavy fire

Arkansas payday loan industry is severely criticized by non-profit watchdog group, Arkansas Advocated For Children & Families. The group published its research paper, Payday Lenders in Arkansas describing how payday loan stores partner with out-of-state banks to evade state law under which the payday loans stores must:

- obtain and maintain a bond of $50,000 to protect consumers
- maintain $20,000 in operating capital
- limit the maximum loan to no more than $400
- require no more then one check per customer be held at a time
- require that checks be dated on the day of the loan and not postdated
- limit the maximum fee for a payday loan at $10 per $100 borrowed plus $10

According to the research, partnership with out-of-state banks effectively make these provisions void and allows payday loan stores charge out-of-state fees. The interest charged often exceeds 400 percent.

This is the first attack on thriving Arkansas payday loan business where many low income working families are trapped in vicious debt cycle. The group just issued recommendations on Alternatives To High Interest Payday Loans.

 
Welcome

Bad Credit Advisor online magazine provides daily news about credit, debt and mortgage. We aren't paid to mention specific deals or products. We cover what we think is interesting as industry professionals ourselves.

Archives
Recent Entries
Information

About
Contact
Disclaimer

Syndicate

RSS 2.0 Feed Bad Credit Advisor RSS 2.0 Feed

Subscribe with Bloglines

Add to MyYahoo