“Even in their public comments by representatives of the payday loan industry, they can't help themselves-they must continue to try and deceive. The Annual Percentage Rate is a term of measurement. Just like miles per hour measures your speed regardless of whether you are driving 15 minutes or 6 hours. Their main objection to the APR is that it tells people just how bad these "loans" are.”
“"UPDATE: CFSA's Steven Schlein wrote the Huffington Post to say that his "Wild West" characterization was directed at "rogue offshore lenders," not the entire online lending industry.
Whoops-I guess someone clued him in that his members are also online payday lenders.
"Schlein wrote that the OLA "has been a constructive force in its efforts to bring industry best practices and standards of conduct to the internet cash advance sector."
If by Industry best practices and standards of conduct he means:
1. Selling a product that looks like a short-term loan but is designed to trap the borrower into repeated loans.
2. Deceiving the borrower and the public about the real cost of these loans
3. Hiring bloggers pretending to be members of the public to talk about how "helpful" it is to pay 400% interest for a loan.
4. Constantly creating new products and re-inventing their product to avoid state and federal laws.
Then I agree!”
“"Steven Schlein, a spokesman for the Consumer Financial Services Association -- the storefront payday lending lobby -- told the Huffington Post that online lending is "the Wild West."
I am assuming by this comment that members of the CFSA are somehow better in how they gouge their borrowers? Perhaps they are more ethical and willingly comply with state laws? Guess what? Several members of the CFSA are also online lenders. For example, the two biggest storefront payday lenders in the country: Advance America and Check N Go.
In Virginia, Advance America and others systematically shifted many of their customers last December from payday loans to "lines of credit" in order to avoid changes to Virginia's payday loan law that went into effect January 1st. They testified in our state legislature that they weren't trying to get around Virginia's laws, just offering a new product. That testimony, just like everything else the payday lenders have to say, is ____ (see Dale Pittman's last comment in the story).”