Texas Car Title & Payday Loan

I guess this pair of robbers couldn’t get a baby-sitter. The most recent in a string of nationwide payday loan store robberies had an interesting twist.

The man who demanded money at the Texas payday loan store held a gun. The woman with him, his suspected accomplice, held a baby.

Incident report

The robbery occurred Thursday just after the Texas Car Title & Payday Loan in Amarillo closed. A man approached the clerk outside the store at gunpoint and demanded he open the store and give him cash. The employee says the man was accompanied by a woman and a baby.

Suspect descriptions

Amarillo police say the man who held the gun was about 6 feet tall, apparently in his 30s, had a thin-lined beard and was black. The female appeared to be about 20 and also black. No further details were available regarding her description.

Meanwhile, in California

Also Thursday, a payday loan store in Moreno Valley, Calif., was robbed. The whole thing was caught on tape, and the tape was released to the public through local news sources. There is no word yet on whether the suspects have been caught.

Check out the video

The video shows two men entering the business, one brazenly holding a gun in plain view. Neither man’s face is covered. The robbery occurred shortly after noon. You can watch the video of the holdup at Advance America Cash Advance in Moreno Valley at a California news organization’s web site.

Recent robbery

Also last week, a payday loan store in Waukegan, Illinois, fell victim to robbers. Police and witnesses report that two men robbed the business, one of whom had a gun. One man held the gun to the store employee while the other went behind the counter and filled a duffel bag with cash.

Suspect descriptions

The first suspect in the Illinois robbery, who held the gun, is described as a man about 18 to 22 years old. He is about 5 foot 8 and 120 to 130 pounds. He has a dark complexion and was wearing a black hooded sweatshirt, black jacket and a black ski mask.

The second man, who went behind the counter, fit a similar description, employees said. He had lighter skin and was wearing a blue sweatshirt with a zipper and dark jeans.

New Hampshire’s Banking Commissioner has denied the request of payday loans lenders to charge 365% on open-ended lines of credit.

The South Carolina lender Advance America Cash Advance was fighting the the law that passed 8 day ago in New Hampshire capping annual interest rates on payday loans to 36%.

Peter Hildereth, the banking commissioner, declared the latest request to be unreasonable and predatory.

The request by Advance America was to loan money under a different section of banking law that would allow them to loan out money without being subject to the interest rate caps.

After stating that a consumer who borrowed $500 dollars at 365% interest for a year would end up paying a grand total of $2325 in interest, Peter Hildereth said the following;

“Brought down to its basic level, it just is not fair”

I agree, and I think that anyone would. $2325 dollars in interest on a $500 dollar loan is clearly an injustice when examining the situation at a quick glance. Looking at the situation a little closer, however, reveals an entirely different story proving that the lenders are actually the ones who have been dealt with unjustly.

The Truth Made Clearer

For instance, the 365% interest rate here has been explained using an unrealistic example. First of all, the interest rate here is an annual percentage rate which means that the $2,325 dollars in interest being charged on the $500 dollar loan in the example above, is based on the assumption that the consumer borrowing the loan would have to let the loan loan lapse for an entire year without making and effort to pay anything back. You would be hard pressed to find a consumer who would be so irresponsible as to miss payments 26 times in a row. The standard term for payday loans is two weeks.

Payday loans lenders typically charge up to 521% when it comes to interest rates. That being said, even at the highest percentage of 521%, far above the 365% charged by Cash Advance America, the total interest charged on a loan of $100 dollars for the standard term of two weeks, would cost the consumer only $20 in interest charges.

This is only a 20% interest charge on the money borrowed and a far cry from the ridiculous claims of misinformed payday loan opponents.

Putting things into Perspective

Now that we have revealed the truth in payday loan lending rates, let’s consider the situation from the side of Advance America and other lenders who are suffering from these interest rate caps.

As mentioned above, the caps were enforced at an annual percentage rate of 36%. For lenders this means that on a $100 dollar loan given on a two week term, the total profit made on interest charges for each loan would be $1.38 or just short of a dime a day.

You can now understand Advance America’s request to loan funds under different laws, as these low annual percentage rates will prove devastating to them and other payday loans businesses.

Adding Insult to Injury

It’s shocking that laws such as these are being passed with our economy in such a fragile state. These laws will create additional job losses as lenders will be forced to lay off employees or close stores altogether. For consumers everywhere who are having a hard time making ends meet, payday loans are a saving grace when the need to avoid late payment penalties with creditors or other small financial emergencies arise.

Show Your Support!

For those of you who have used payday loans and have seen their advantages, consider writing your local and state officials showing your support and expressing your concern over the latest trend sweeping the country capping lender’s interest rates.

It’s Should Be The Consumer’s Decision

When it comes to interest rates, consumers like you should decide what is acceptable and what is not through your simple choice to use or not use the services of payday loan lenders.

One thing is for certain, if things don’t change, these sources of of obtaining quick payday loans will cease to exist.

In the midst of a financial crisis and a failing economy, payday lenders are fighting to stay alive as local, state, and federal regulators try to cap the interest rates these lenders charge consumers for short term payday loans.
The latest in the line of persecuted payday lenders is South Carolina based Advance America Cash Advance Inc.

Advance America Cash Advance claims that it can’t make enough money under the new laws that are being passed to keeps it’s doors open to it’s consumers, effectively driving them out of business like many other payday lenders across the country.

New Law, Old Tactics.

For payday loans stores in New Hampshire, the law that takes place on Thursday, January 2, 2009, and will cap the percentage rates to 36%.

For consumers, 36% may even seem like a high interest rate but the thing to remember here is that the interest rates are calculated on an annual percentage rate basis, so for a one hundred dollar payday loan, a 36% APR would equate to only about $1.38 in total interest charges on a two week payday loan. This is barely over 1% of the total loan value.

Clearly these tactics are aimed at driving these lenders out of business without having to officially ban them.

Next on the Endangered Species List

What Is Fair?

Typically payday loan lenders charge around $20 per $100 borrowed on a two week term. This amounts to an annual percentage rate of about 521%. The new cap reduces revenue per loan almost 1,900% which would be a heavy blow to any business’s bottom line.

The question as to what APR is fair is up to consumers not regulators. If the rates are to high consumers won’t borrow extra cash utilizing these lending services which will force these businesses to find a profitable balance between revenue and market share.

A New Hope For Survival

To stay alive, Advance Cash America Advance is hoping to loan money under other sections of banking law. This would allow the company to charge their usual annual percentage rates without falling under the current restrictions of the new laws passed against payday loan lenders in New Hampshire.

The Pro and Cons of Payday Loan Lending

The battle for and against payday loans has been a continuing battle and a constant struggle for lenders across the country with many states already implementing bans on payday loans.

Why the animosity towards these lenders? Opponents call them predatory and convince the public around them to believe the same with advertising campaigns that draw attention to the perceived high annual percentage rates of 521 percent but in the process fail to explain what the total interest on the loan would actually equate to.

The uneducated public looks at 521% as having to payback over five times the amount of the borrowed loan. It’s no wonder they get outraged and fall towards the opponents side of the payday loan debate.

The Cost Cost of Payday Loan Regulation

Banning and or putting payday loan lenders out of business is really a shame for many reasons. First off we have people losing their jobs in an economy that cannot afford to continue in that direction. Secondly, payday loans offer a service that is unparalleled by any others within the financial industry.

Hundreds of millions of dollars in these loans are given out out to applicants each year proving both their popularity and their worth. Bad business will eventually crucify itself. The fact that these cash advance centers are still open is a testament to the value of their services.

What Makes Payday Loan Lending Valuable to Consumers

Nowhere else can you go today to apply for extra cash and receive it almost immediately after approval.

You can now apply online for payday loans and have funds deposited directly into your account. These loans usually don’t amount to more than $1500 and require minimal criteria for approval making them ideal for individuals with bad credit or no credit at all. The two most important requirements applicants are required to have is a current employment and a checking account for funds to be deposited into.

For life’s little emergencies that demand extra cash, payday loans are hard to beat. For example, if your car breaks down today, how do you get to work tomorrow? Perhaps your short on funds to pay your monthly bills where a payday loan could help you save money by eliminating lay payment fees. Maybe it’s the high scho0l prom this week and you need to purchase your daughters dress, but your short on funds till your next payday. Emergency funds are needed from time to time and that is what makes payday loan lending a valuable service.

There are hundreds of scenarios that could find you benefiting from the use of payday loan services. Be sure to take the time to educate yourself on the payday loan industry before joining forces with payday loan opponents. After all, you may just find yourself in need of payday loans yourself someday.