FiSCA, the payday lending industry and others wait in D.C. for new financial rule. (Photo Credit: Public Domain/U.S. Bureau of Land Management)

The Financial Service Center of America (FiSCA), a trade association that represents check cashing and payday lending stores, has moved from its 20-year home in Hackensack, N.J., to Washington, D.C. Bloomberg Business reports that this will place FiSCA a mere two blocks from the newly formed Consumer Financial Protection Bureau. According to FiSCA general counsel Ed D’Alessio, the move enables the association to meet the increased levels of financial regulation that are on the way for the financial services industry.

FiSCA awaits a flurry of regulatory moves

FiSCA, which had been regulated primarily on the state level before the Obama administration’s financial reforms, handles approximately $106 billion annually in transactions for more than 30 million customers via such transactions as payday loans, investments and other financial arrangements. The payday lending industry and other groups represented by FiSCA are hopeful that new regulations will enable them to take market share from traditional banks that offer similar services, but financial legislation will determine the success of this endeavor.

The Dodd-Frank Wall Street Reform Act (aka the Dodd-Frank law) sketched the new regulatory landscape only in broad strokes. Thus, Bloomberg reports that there are as many as 330 new rules on the way by July that will affect payday lending, derivatives trading and mortgage lending, to name but a few industries. Some industries will benefit from Dodd-Frank, while others will face greater restrictions. As financial regulation expert Douglas Elliott of the Brookings Institution told Bloomberg, what happens to bankers could play a significant role in the U.S. economic recovery.

“Bankers could be hurt badly or could come away without too much damage, and the economy could be helped or hurt, depending on those choices,” said Elliott.

Mortgages: A blip on the consumer protection radar

Wells Fargo would like the Consumer Financial Protection Bureau to allow banks to retain a stake in home loans sold into mortgage-backed securities. U.S. Bancorp and SunTrust Banks are lobbying to exempt a wide array of mortgages from crackdown, while Wells Fargo is seeking to exempt only those riskier mortgage loans with a 30 percent or higher down payment. Smaller banks want the extra exemptions because they are less equipped to handle risk.

Sources

Bloomberg Businessweek

Wikipedia entry for the Dodd-Frank Act

Dodd-Frank and the danger of making bank decisions on political grounds

Check Into Cash claims to have “pioneered the payday advance service.” What is certain is that the process consumers go through when they wish to apply for payday loans, cash advance or payday advance loans couldn’t be simpler. Fill out a quick application and receive a decision very quickly. If approved, you can receive the money via direct deposit (if you’re applying online) or in instant cash (if at a Check Into Cash store). To pay back the loan, all you need to do is write a postdated check – with a one-time, flat fee included – for the following payday.

Check Into Cash is “QUICK, EASY & CONFIDENTIAL”

When you need quick cash during an emergency, you don’t want to be inconvenienced. That’s where Check Into Cash (aka checkintocash and checkintocash.com) comes in with its three-sided promise. The application and funding process is quick, which eliminates the worry that you’ll be able to get the money you need in time. When you apply in person and are approved, the money comes in an instant. Online, it can happen in as little as a few hours.

It’s also easy to qualify and apply for payday loans, cash advance or payday advance loans at Check Into Cash. To qualify, you must:

• Have held your current job for a minimum of 90 days
• Be at least 18 years old (19 in Alabama and Nebraska) and a citizen or permanent U.S. resident
• Earn at least $1,000/month after taxes
• Have current home and work phone numbers and a valid E-mail address

What do you need to apply at Check Into Cash?

This is also easy. Make sure you have:

• An up-to-date pay stub
• State or federal photo ID
• Most recent checking account statement

Confidentiality is important

Whether you apply for payday loans, cash advance or payday advance loans at a Check Into Cash location online or in person, your sensitive information is protected with great care and professionalism. You don’t have to worry about identity theft with systems belonging to Check Into Cash.

Checkintocash.com stats from Compete.com

As a veteran of the payday loans industry, CheckIntoCash.com garners significant traffic. In December of 2009, 83,174 unique visitors came to the Web site, which is a 16.94 percent increase over the previous month. Overall visits totaled 101,451, which showed a similar 16.98 increase. The top three paths to checkintocash.com were Google.com (25.36 percent), checkintocashonline.com (19.96 percent) and Yahoo.com (7.85 percent).

What are people searching for that leads them to Checkintocash.com?

The leader and most obvious choice is “Check into cash,” which amounted to 34.33 percent of searches. “Checkintocash” (4.46 percent) and “advancepay” (2.62 percent) followed far behind.

Fortunately, you won’t be far behind if you need quick cash and apply for payday loans, cash advance or payday advance loans at Check Into Cash. Personal Money Market respects their place in the industry.

Related Video:

(Currently not buying cash advance leads of ours)

You’ve seen the commercials with the glib slogan and the checkmark finger motion. You’ve probably seen their stores in your neighborhood, too. Ever since Check n Go first opened their doors for business in 1994, they’ve grown at a fine pace to serve the needs of consumers with payday loans, title loans, check cashing and Axcess pre-paid MasterCard debit cards. Their ultimate goal is to provide “Honest, simple money solutions, every day.” With an uncomplicated attitude like that, it’s no wonder they’ve made headway in the growing payday loan and installment loan market. We are not associated with Check n Go but we still recommend you apply online at checkngo.com or make your way to one of the many Check n Go locations.

Keeping Your Data Secure

Like most reputable payday loan portals the caliber of Personal Money Market, Check n Go protects the sensitive contact and financial data its customers provide during the payday loan and installment loan process. Privacy is a vital concern, particularly in an age where online identity theft can happen to anyone. One look at Check n Go’s privacy policy (See https://www.checkngo.com/pdf/privacy.pdf) should tell you just how serious an endeavor this is, but in a nutshell, you should know that if they need to contact you, they will identify themselves only if they are talking to the actual customer. For online privacy, Check n Go uses industrial strength security measures like VeriSign and 128-bit Secure Socket Layer (SSL) encryption. Thus, you are protected in both the real world and in cyberspace.

Why Does Check n Go Require Info to Approve You For a Payday Loan?

First of all, Check n Go (or checkngo, if you prefer) is committed to helping maintain America’s security. Thus, to ensure compliance with the Patriot Act, proper identification is required to help ensure that payday loans and installment loans are not being used to fund terrorism or related money laundering activities. Federal law requires that Check n Go, Personal Money Market, or any other payday loan portal  obtain, verify and record the proper info from anyone who opens an account. Federal identification, Social Security number, verifiable contact, employment and banking info are needed for all who wish to apply for payday loans. Faxing of these documents is often not required for online applicants, making the entire process quick and convenient.

Check n Go : A Robust Online Payday Loans Location

According to Compete.com, ChecknGo.com had 170,267 unique visitors to their Web site in November of 2009, which reflected a whopping 54 percent increase over the previous month. Compare that with their numbers for the rest of 2009. You’ll see that Check n Go experienced quite a surge. Was it their advertising? See the video below, it’s very straightforward and useful. Then consider the total number of visitors for the month, 249,813, which marks a 25 percent increase. These are big numbers, so Check n Go must be doing something right.

Turns Out You Can Get There from Here

Interestingly, the megalith Google.com did not lead the pack of referral sources for Check n Go. Yahoo.com directed 12.03 percent of traffic for November 2009, while Goolge.com was close behind at 11.64 percent. Facebook came next at about four percent, which is indicative of that social network’s market power. Search words included “Check n Go” at 22 percent, “payday loans” at six percent, “checkngo” at five percent, “check n go locations” at four and “check n go personal loans” three.

It Really is That Fast: Check n Go!

Personal Money Market says that if you’re looking for payday loans, try us first. Check n Go won’t steer you wrong, however. They’re fast and they have a devoted customer base.

Related Video:

In what universe does a one percent check cashing fee exceed a $35 overdraft fee for overdrawing a checking account by $.01? (Photo: flickr.com)

In the 1960s and 1970s, many of America’s largest banks decided to go “where the money is” by pulling their branches out of the inner cities and focusing more on affluent areas. It may be sheer coincidence that infamous bank robber John Dillinger once gave that response to the question of why he robbed banks, but I’ll leave that for you to decide. Only in recent years has that trend begun to reverse.

What this exodus created was a growing population of “unbanked” individuals and families, people who depended upon everything from shoe boxes and coffee cans to store their money to check cashers for paycheck services and payday lenders for emergency cash. The traditional view society took of such people who depended upon check cashing and payday lending was that they were the “unsophisticated poor.” However, re-examination of this idea is advisable, as the truth may be that the unbanked are more knowledge about what the banking establishment is foisting upon consumers that we’re willing to admit.

Avoiding the World of High Fees

A recent New York Times article explores the phenomenon of why so many people are resorting to alternative measures rather than depending upon traditional checking accounts. While the journalist fails to produce any conclusive reasons, it doesn’t take much to read between the lines – the cracks in society’s pavement, if you will: overdraft fees of $35 per infraction for a checking account mistake are exorbitantly more expensive than a check casher’s fee of a few percentage points to cash a paycheck.

Jose Abreau Says “No”

A 37-year-old native of the Dominican Republic, Abreau denies the bank representatives who come to his New York coffee shop to recruit him into the world of traditional banking. He doesn’t see the point, as what money he earns beyond his immediate needs is sent to his family back home. He does this in spite of the fact that banks are credit unions are within easy reach. However, so are check cashing businesses.

A recent Pew poll indicates that 86 percent of licensed check cashers in Manhattan are located closer than four blocks from a bank or credit union. People like Jose Abreau actually walk past the banks and credit unions to get to the check cashing businesses and payday loan stores. Perhaps this is because many immigrants come from countries where friends or relatives lost money due to bank collapses or corruption (where there was no FDIC to step in and insure the deposits), but in reality there are a wide variety of reasons. Language barriers can exist, but community outreach groups are available to assist. Financial education is available for those who may not understand how traditional banking works. However, the way many banks treat consumers stands at the top of the list as to why someone would not want to rely upon the banking monolith.

Not So Unsophisticated, Are They?

Millions of Americans live from paycheck to paycheck. That’s a fact that the current recession has made painfully clear. Yet this does not mean that these consumers who are just making it are unsophisticated. On the contrary, they’re educated enough to see that if a surprise expense or miscalculation dips their checking balance into the red, the resulting overdraft fees are unconscionable. Rather than having such an organization hold their money hostage, many people feel more comfortable with check cashing, where all the money they have is right there in their hands. Check cashing fees are much lower than any overdraft fee or minimum balance penalty.

How Much Lower?

Consider this. Many banks extend customers the “courtesy” to use ATM machines to withdraw more than they actually have in their accounts. This comes with a heavy – and damningly silent – penalty. We’re talking 200 percent on overdraft fees or more. How is this no legal fraud? How can this be advertised as a courtesy? Is it any wonder that check cashing customers don’t want anything to do with such institutional treachery? If banks would charge no overdraft fees and simply not allow purchases that would create overdraft to go through, they’d probably draw more of a customer base. But banks depend upon overdraft fees for much of their operating profit, so it’s clear that they have little incentive to stop.

Imagine this scenario if you don’t already understand just how disillusioned some are with banks. If a working poor family bounces a single check – let’s say it’s for a mere $3 – there’s an overdraft fee of $35 or more. That could be a weekend’s worth of food for hungry children, plus diapers and subway fare. If the family doesn’t keep their balance above a certain figure, they could be paying even more. Yes, if overdraft fee policies were different, I’d be telling a different tale. And some banks and credit unions do offer free checking. But not everyone meets the credit or documentation requirements, or their local bank many not offer the service. For the transportationally challenged, that means taking what’s closest to home.

What Carrot Could Banks Possibly Offer?

Banks are crying out for customers in this recession, aren’t they? What kinds of incentives could they offer to make people want to use their services? Aside from being able to receive direct deposit or develop a credit history, it seems that people would like to earn a decent amount on their money. But savings accounts that offer .0125 percent interest don’t cut the mustard, let alone the artificial buttery spread. It’s better than nothing, but not by much. Factor in the fees and penalties and traditional banking can feel as good as a sock in the eye.

Hiding from “The Man”

Those who avoid traditional bank accounts for the services of check cashers may be hiding, too. I mention this not to justify the practice, but it’s something of which we should be aware. Without a checking account, bill collections and courts have one less option for skimming cash in the event that the consumer owes money. Of course wage garnishment is still a possibility. And what about those people who avoid traditional banking because their income is under the table? Being able to cash in on certain welfare benefits is a powerful lure, which could explain why some consumers don’t feel the compulsion to put their money in the bank where it can be detected so easily.

Not Such a Rosy Picture for Most

One reader commented on the New York Times article in a manner both poetic and bitingly real:

O, these great unwashed masses, unwilling to strap themselves to our glorious consumer banking system where they can know the joys of ATM fees, NSF fees, account maintenance fees, account research fees, etc. , all while enriching themselves on the 1.8 percent interest rate! What is wrong with these people? Don’t they want to be part of the American Dream?

Avoiding traditional banking is second nature for many, but steering clear of it entirely can have its disadvantages. Check cashing is an attractive option for those who can ill-afford the predatory practice of overdraft fees. Unfortunately, that would include most people. Many who have money do not understand just how much the deck is stacked against those with so little. Bank presidents think in terms of profits; bank customers hope not to run afoul of bank policy, as they have become increasingly unprofitable for consumers with each passing year.

Payday Loans have the green light when it comes to going where the financial need is greatest. Access to conventional credit plays a large role. (Photo: flickr.com)

Payday loans are an inescapable landmark in America’s modern economic landscape. The popularity of the short term loan product has grown significantly since the early 1990s, and it’s no wonder. Giving consumers the ability to absorb financial shocks in the short term – enabling them to avoid hefty penalties – is useful for maintaining economic welfare. It is important for consumers to be educated as to their alternatives in a financial emergency, however. For their part, the payday lending industry (organized under such groups as the Community Financial Services Association and the Online Lenders Alliance) has helped to educate consumers as to how payday loans work and when they should or shouldn’t advisably be used. However, the responsibility rightly rests with the individual.

Unfortunately, the image still persists within the popular media that payday loans are an instrument through which unscrupulous businessmen and women exploit “at-risk” members of society. One of the primary means these critics use to attempt to prove their point is by focusing on the geographic clustering of brick-and-mortar payday loan locations (as well as pawn shops and check cashing outlets). This fails to take into account online payday loan companies and aggregators like Personal Money Market, whose average customer by income tends to fall comfortably into the middle class. However, when brick-and-mortar locations only are considered, a clear pattern of going where demand is greatest becomes apparent. A recent study by Robin Prager, the Assistant Director in the Division of Research and Statistics for the Board of Governors of the Federal Reserve System, supports the assertion that payday loan businesses tend to cluster in areas where access to credit may be restricted and liquid assets that help consumers handle financial surprises may be closer to scarce than abundant.

“Determinants of the Locations of Payday Lenders, Pawnshops and Check-Cashing Outlets“

Prager groups payday loans, pawn shops, check cashing and a number of related short term loan companies under the name “alternative financial service providers” (AFSPs). Recognizing the controversy the rapid growth of these institutions has generated, Prager analyzes the geographic placement of AFSPs. Using county-level data for the entire country, she expands upon the regional work most studies had undertaken before. Demographics, population, consumer credit profiles and the degree of strictness in state and local laws all play a role in where the largest clusters of AFSPs appear.

Rules and Regulations Facing AFSPs

Payday lending, pawn broking and check cashing aren’t overnight sensations. They date back to at least the 1930s, although payday lending may date back to Colonial America and pawn broking in its various forms is particularly ancient. As with any explosive growth industry, there has been a need for regulation. AFSPs are subject to regulations on the federal, state and local level. Such things as the Gramm-Leach-Bliley Act, the USA PATRIOT Act, and the Bank Secrecy Act all have jurisdiction. Moreover, all loan companies must follow the federal rules of the Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, and the Talent-Nelson Amendment to the 2007 Defense Authorization Bill, to name a few. On the state and local level, numerous and variable other regulations exist. It’s safe to say that a regulatory maze exists when it comes to AFSPs. While they do serve to protect consumers against potential exploitation, the question as to whether over-regulation has stifled competition with the consumer financial services industry is a more than legitimate area for study.

Urban vs. Rural Distribution

Prager found that in 2006, 98.9 percent of rural and 99.6 percent of urban counties in the U.S. featured at least one bank or thrift branch. Furthermore, two-thirds of rural and 90 percent of urban counties had at least one AFSP provider (payday lender, pawnshop, check casher, etc). Considering population by county, the average of 33,000 people were serviced by 2.5 payday loan stores, 1.2 pawn shops, 1.7 check-cashing outlets and 10.7 bank and thrift branches. On the urban side, the numbers change to 220,000 people, 16.6 payday loan stores, 7.4 pawnshops, 21.2 check cashers and 67.5 bank and thrift branches. AFSPs like payday loan companies are certainly not more prevalent than banks in Prager’s sample.

Where Do the Payday Lenders Congregate?

Prager found that the highest concentration of payday loans outlets on a per capita basis came in southern states where regulation is more forgiving: Alabama, South Carolina, Tennessee, Mississippi and Louisiana. Pawn shops concentration was also high in such areas (primarily Alabama, Mississippi and Tennessee), although check cashing ranked highest in California, Delaware, Mississippi and North Carolina.

Banks and thrifts found their highest concentration in the north central states, including Kansas, Nebraska and North Dakota. This did not tend to correlate into having a negative effect on the number of pawn shops and check cashing outlets in a county, but Prager did find a positive correlation when it came to payday loan stores.

Credit Scores Point to Subprime

Here is where we get to the heart of the matter with AFSPs like payday loan stores. They tend to appear where the need is greatest. If consumers have difficulty security mainstream credit in an emergency, then payday loans become a very attractive option. Prager introduces an equation that factors credit availability and a variety of other factors in order to express the number of AFSP outlets as a function. It is a function of the following demographic data: racial/ethnic mixture, age, consumer education, poverty standing and the county’s population density. As stated, creditworthiness and area regulations are also factors.

Here are some of Prager’s comments on results:

Looking first at the equations explaining the number of payday loan stores per million capita, we see that the results are fairly similar for urban and rural counties. In both cases the number of payday loan stores per million capita is negatively related to the share of the population that is Hispanic, positively related to the share of the population that is non-Hispanic black, and unrelated to the share that is Asian. Payday lenders are more prevalent in both urban and rural counties where a larger share of the population is below the age of 40 and less prevalent in both urban and rural counties where a larger share of the population lives below the poverty level. The number of payday loan stores per million capita is significantly related to the share of the population with a high school diploma (negative sign) and population density (positive sign) in rural, but not urban, counties.

Patterns in Payday Loan/AFSP Placement

Prager recognizes a few general patterns: 1) Payday lenders/AFSPs appear in credit challenged areas; 2) But they tend to avoid areas where the poverty level is highest; 3) AFSPs and other payday loan businesses aren’t seen to be particularly concentrated in Hispanic regions; 4) Payday lenders do tend to appear more in the African-American community; 5) population density and payday lending presence are connected in rural areas, but not as much in urban; and 6) Not surprisingly, areas with tighter regulation show a much lower instance of payday loan companies.

Payday Lenders Do Not Prey on the Poor

This is what Prager found based upon county-to-county data and it runs contrary not only to what the mainstream media would have you believe, but to the findings of a number of past studies. Credit scores remain a prime factor in distribution of AFSP. Going where the need is greatest is an idea that holds up in this instance. Mainstream credit may be less expensive on average, but if a consumer does not have the credit to access such a thing, then payday loans are the best options. As federal, state and local governments devise new ways of continuing to limit the industry, what exactly do they think credit-challenged individuals are going to do? If sinking beneath the waves of poverty so that they’re “out of sight, out of mind” is a feasible solution for elected officials, then perhaps people who can display more reason and human compassion deserve a turn.

Apply for Payday Loans here!