The reality is that 391% rate averages out to about $15 interest on a $100 payday loan. Now let us have some perspective…an overdraft fee from your bank is typically $34. A reconnection fee for utilities may be $50. A late-payment fee on a credit card is typically $25. The payday loan fee is actually the cheapest and most reasonable fee out of all of them.

Payday loans have their purpose. They exist so that people who cannot otherwise obtain a favorable loan through a traditional bank can cover unexpected expenses. They are not “unfair” or “predatory” in any sense.

The bipartisan Consumer Credit Access, Innovation and Modernization Act will establish a federal charter that clearly defines a set of transparent national standards, allowing lenders to provide more credit alternatives with lower costs as well as flexible payback periods and loan amounts.

Nonbanks operating under a federal charter will have to comply with all federal laws and regulations applicable to other bank lenders, including the consumer protection authority of the Consumer Financial Protection Bureau. We are asking every lawmaker to seriously consider this legislation so that millions of Americans will have access to the kinds of innovative financial options that they’re demanding.

Meanwhile, the Online Lenders Alliance will keep working to stop deceitful and fraudulent practices.

Since OLA was established in 2005, we have been working with the FTC and law enforcement agencies to protect our customers. In fact, we helped the FTC bring down an agency that collected phantom short-term loan “debts” that consumers did not owe. And we also hired Freeh Group International Solutions, a global risk management firm, to investigate fraudulent practices reported to OLA.

It isn’t about a perception problem; it’s about doing right by those who use our products.

Lisa McGreevy
President & CEO
Online Lenders Alliance

Regardless, small dollar lending is an emerging market. Whether you’re getting a loan from Muhammad Yunnis or the local payday lender, if you use these opporunities wisely, they can be a means to the end of improving your credit and thus your prospects for a better life. But in the narrow attempts by groups like the CRL to snuff out payday lenders, they are creating regulations and rules that will make all forms of subprime credit unavailable to those that can most benefit from it.

Consumers who willfully, and inteligently chose to use the time and place convenience of online access to short term credit products 1) do so with ample sources of supply agressively competing for their business; 2) don’t have “trashed credit scores” but are often well above the credit cut-off scores for traditional sources of credit like banks and credit unions; and 3) clearly know that a short term loan is a cheaper alternative to many other options inlcuding bank and retailer NSF fees.

Short term lending is a legitimate service meeting an increasing demand in this country. It is a highly regulated actvity on both the state and federal levels. Well placed and approptiate efforts by those regulatory agencies to ensure compliance may, in fact, be appropriate. What is inappropriate are less than accurate opinions being touted as fact, or individual events or firms being construed as representative of an entire industry.

I am a recovering Ronald Reagan born again Christian-Libertarian-Protesting-Ant of the Luther/Gutenburg/WASP bible kind. I hate daGubamint with a passion but love all Men and Women. Remember as a Life Member of the LP Ive sworn off physical and even poltical violence so we are just debating here. Please BE offended but don’t hurt me for telling YOU what I see as the truth.

The key is to quit asking legislator/regulators to prevent self destructive individuals from hurting themselves and demand that Government do its job by actually prosecuting and punishing real Crooks and Criminals in way that hurts them not society or the taxpayers.

Try this. Lets go back to the idea of making it perfectly OK for any citizen to leave behind a $20 Bill, the car and house keys in a plain paper envelope addressed to Federal Bankruptcy Clearing House. After 7 years ALL outstanding debts – yes even those nasty student loans and IRS penalties – are forever gone. Kinda like the old Jewish Bibles tell ALL money lenders to Just Do That!

That, ie loosing their “investments” would and should cause banksters to fail (no FDIC Insurance funded by the little people either.) I hear that the joys of Hobo Tent Camping or Couch Surfing on empty stomachs comes close to what Privatized Federal Drug Prison life is like. So That’s fair too.

LOL: “If you like what you see vote GOP”… We were just having this discussion with our teenager, about how the Republican party tends to the Darwinian “If they’re stupid, let them get pulled under by market forces”, versus the Democratic “safety nets for everyone” approach. Sometimes there is no good answer for injustice, other than “shine a light on it and, if you can pin it down, then burn it out”…

Thus bankers themselves own the SEC, the Fed, and every other agency that might possibly regulate payday lenders. They see them all as brothers.