payday lending initiative update

by problembear

i know i haven’t posted in awhile and i have tried to stay away but Mt initiative I-164 is just too important to ignore. if we are to get this citizen’s referendum up for a vote this november we have until June 18 to do it.

if you are reading this and if you or someone you know has been hurt by payday lenders please leave a comment here and tell us your story. i have been fired up about this ever since finding out what a crooked title loan place did to my daughter’s credit many years ago. up until then, i never imagined that a state licensed business could be allowed to treat people as they do in this shady predatory lending industry. i thought only the mafia acted this way in dark alleys. but, in less than ten years these places have sprouted like toxic weeds accross Montana. in fact, since 2001, predatory lenders have multiplied so much that they actually outnumber starbucks in this country.

Montana state law currently allows payday lenders to charge 650% interest per year and auto title loan businesses are allowed to charge 300% interest per year. these interest rates are unconscionable to any thinking fair-minded citizen which is why Montana’s citizens are stepping  up in the next three weeks to gather signatures so that we can get this referendum on the ballot this November and protect our most vulnerable working families from this greedy destructive bloodbath. many states such as oregon and ohio have already enacted citizen sponsored legislation which protects their working poor from these loan sharks. we must do the same. if you wish to help please contact Erin at Montana Women Vote and gather some signatures so that we can at least regulate this industry to a reasonable interest rate of 36% per year.

Montana Women Vote has a lot of good information about these predators and they are a lot smarter than me. please consider helping them to gather signatures for this important petition initiative and contact Erin. if you cannot gather signatures please seek us out and sign your name to the petition along with the growing thousands of montanans who want our state to treat our working poor with more fairness.

and thanks for having the patience to listen to a bear of very little brain once again.

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  1. Moorcat

    The problem with trying to legislate these businesses is that they will simply change thier tactics. In Oregon, for example, they change a “fee” to do the transaction that is exorbant but doesn’t fall under the umbrella of “interest”.

    The biggest threat to these legal loansharks is education. That still won’t stop people from using them, but it might slow down the tide of these things expanding.

    Moorcat

  2. moorcat- hearsay generalities, vague half truths and your misinformation about oregon’s payday lending laws can be easily dispersed with a simple five minute google search:

    Governing law in state:
    Cash advance loans are legal in Oregon. In 2006, however, the state passed new laws placing more stringent restrictions on payday loan creditors by reducing the loan origination fees and the maximum interest rate that they can charge. The maximum number of outstanding check cash advance loans that a borrower may have is one. The law prescribes a cooling-off period of one day if the provider has issued a renewal for the prior cash advance loan three times. Oregon’s legislation does not specify whether the lender has a private right of action and/or whether he can institute criminal proceedings against a delinquent borrower.

    Maximum loan amount:
    A payday loan may not be for an amount greater than 25% of a consumer’s gross monthly income.

    Loan terms:
    The loan term is 31-60 days.

    Extensions:
    The law allows a borrower to extend or rollover a cash advance loan three times……

    “Fees and charges:
    Payday loan creditors are prohibited from imposing charges other than origination fees, fees for insufficient funds or a dishonored check, and interest. A creditor may not issue or renew a cash advance loan at an annual interest rate higher than 36 percent. The origination fee charged by the check cash advance lender may not exceed $10 per $100 borrowed. A creditor may also charge a one-time $25 NSF (non-sufficient funds) collection fee as well as additional bank fees.”

    this section is taken directly from an oregon payday lender’s website.

    i am cognizant that you and i often agree about many things and i agree that education is important, but it cannot be argued that the above described law in oregon is not a vast improvement over draconian 650% interest rates which montana currently allows.

    education must go hand in hand with strict regulation and legislation by fairminded citizens. anything less would only encourage more predatory practices.

    we badly need to vote on and pass this law to keep these sharks in deeper water and away from montana’s working families.

    • i’m really curious as to why you so obsessed with this issue…

      • Lizard

        hey rusty, why don’t you try actually reading the post.

        i have been fired up about this ever since finding out what a crooked title loan place did to my daughter’s credit many years ago.

        regulating predatory lending is a no-brainer. i for one appreciate the work problembear has done on this issue.

      • i am more curious as to why anyone sensible would support this business.

        these leeches have targeted our kids, seniors on social security and even our military members (thankfully congress passed a federal law capping interest rates for military families at 36%)

        my revulsion at anyone charging 650% interest is natural rusty. unfortunately too much exposure to right wing ideology has left you tone deaf to even the most evil of injustices to our working poor.

        that is truly curious is how men of any ideology can not see the need to fix this.

  3. Pete Talbot

    Try reading the post before commenting, Rusty.

  4. Moorcat

    Thanks for the information on the new Oregon law. It is vastly better than the original law they passed to regulate these legal loansharks. The first law simply limited the amount of interest they could charge so they started to charge these large “paperwork” fees. I was unaware that they added more regulation to the laws governing payday load outfits.

    • you are welcome moorcat. the new law that will be enacted once this initiative is on the ballot (Ohio and Oregon both passed theirs by 75% majorities) will indeed be a huge improvement over what montana is allowing these parasites to charge our working poor.

      for those who haven’t seen the full text here is montana’s I-164 http://sos.mt.gov/elections/archives/2010s/2010/initiatives/I-164.asp

      it also has been proven in the states that pass this that loan businesses do not in fact simply pull up stakes and leave people with no alternatives either as has been claimed numerous times by the slime devils who try to oppose these measures. most companies do just fine with 36% interest. they don’t make a killing. but they still make a nice return on their investment, which is all they should be doing.

  5. and for those who oppose this measure out of some purist belief that it restricts free enterprise, i understand where you are coming from but as any hunter or fisher knows, fair chase does not involve the use of salt licks, bait stations or dynamite

    we have laws to protect our wildlife from absolute predation for a reason. usery laws are necessary to prevent the wealthy from baiting and trapping the poor into financial extinction.

  6. by the way, i cannot tell everyone what a relief it is to work on a citizens initiative and take the cause directly to the people.

    after two years or more of banging my bear head against the wall trying to get corrupt montana legislators and congresspeople to stand up to lobbyists and do the right thing regarding payday reform, health care reform, etc… it is very nice to feel like something decent can finally be accomplished here. please sign the petition and tell your friends and family about it.

    you will feel good too instead of feeling frustration at the inaction of our elected representatives regarding real change in this country.

  7. Chuck

    PB,
    Thank you for your efforts. I am particularly disgusted by the casino owner-operator parasites opening up title loan businesses. These operators can’t be satisfied with taking grandmas last nickle, they want to leverage her only asset to loan her money to gamble away.

  8. Randy Taggart

    I signed the petition and believe it will pass if it gets on the ballot. Marijuana providers and payday lenders are just feeding the jones. I think both businesses days are numbered.

    • klemz

      Are you talking about medical marijuana providers or the general weed market? Do you know something we don’t?

  9. getting signatures for montana’s cap the rate payday lender’s bill is extremely easy. 99% of the people i have met are supportive and 70% of them come running over to sign it. they are so angry at the current status of 650% interest rates that they usually stay and visit with me about it after signing.

    i knew younger folks would support us but am noticing a lot of parents and grandparents of kids who have been stung by payday lenders are the most vehemently anti-payday loan/vehicle title loan because their kids have been lured into these places and lost their entire paychecks to them or have even lost their cars and trucks and eventually even their jobs because they cannot get to work.

    the stories are amazing. i am saving them for when the vote comes up for this in November. (judging by the reactions i am getting out there, we should get enough signatures to be on the ballot) but i am determined to help Montana Women Vote make sure we can take this to the people in November.

    if you want to help in any way to make sure this thing gets on the ballot please contact Erin:

    http://www.montanawomenvote.org/contact.html
    Missoula Community Coordinator
    Erin Klahn
    PHONE: (406) 531-2378
    EMAIL: missoulamwv@gmail.com

    there are only 11 days left to get er done, so tell your friends and neighbors to sign this. we really need to curb this horrible racket.

    thanks for supporting fairness in lending for montana.

    • Anti I-164

      Those of you supporting this government-regulating-nation bill…get out your checkbooks because when your cousin who overspent to buy cigs and beer can’t feed her children, they are going to come to you looking for a handout. These “awful” lenders take a huge risk on these short term loans, their default rate is HUGE and nobody else will give these bad-choice spenders a loan. Get ready for your taxes to go up because without these lenders…WELFARE IS GOING TO BE ON THE RISE!!!

      • Oh, boy. You’re in trouble now.

        Popcorn!!!!!!!

      • that old tattered dusty argument has also been used to try and stop ohio and oregon from passing similar payday lending laws by huge majorities and the lie failed to fool voters there too. nobody believes that old lie anymore.

        the lenders are still doing business in both states with 36% interest rates. try again. i am waiting.

        • Anti I-164

          Lie! Who’s lying? The government-regulating loving bleeding hearts trying to pass the laws. Calling 400% is too high is an outright lie! They are lumping payday and title lenders in the same category and calling it 400% is too high. It’s illegal for payday lenders to charge 400%, they don’t charge 400% but they are leading the public to believe they do. The people pushing for these regulations are the same people who don’t know how to manage their money and are coming after the lenders. Obviously they can’t compute numbers on more than one level and they haven’t done their research.

          Someone has to take care of the poor and if it isn’t the lenders making a high risk, SHORT TERM, loan with a 35% default rate…get out your checkbooks people because you can :)

          It’s okay…regulate them…it will just add to our country’s demise. We are well on our way!! Free trade is dead and ignorance will prevail…protect the idiots!

          Oh and JHWYGIRL…i’m not scared.

          • current montana state usury laws allow 300% interest for vehicle title loans and 650% interest rates for payday lenders (third highest in the nation)

            the desperate obfuscation of this commenter in trying to cover up the astonishingly evil payday lending greed in montana will not confuse anyone. it only illustrates just how morally depraved this pack of jackals can behave when protecting their industry from badly needed regulation.

            in five days of gathering signatures for this citizens initiative, i have spoken to hundreds and i have yet to meet anyone who defends an interest rate of 650% as reasonable.

          • We’ll see how long you stick around.

  10. excellent letter to the editor in today’s sunday missoulian regarding payday lending here:

    http://missoulian.com/news/opinion/mailbag/article_2dd76a22-7013-11df-a153-001cc4c03286.html

    i especially liked this part dealing with the vehicle title lenders:

    “…Repossessing and selling a family’s only means of transportation, and thus the means to provide an income, for pennies on the dollar is akin to modern feudalism. Why would these companies opt for repossession when they could make several times the return by allowing borrowers to keep their vehicles and employment? Why place high-risk borrowers in a more vulnerable position by removing a borrower’s means to repay a loan with unclearly written, impossible terms within pages of fine print? It’s because they want to make a fast buck….”

    -James Halvorson, Missoula

  11. Anti I-164

    Problembear…are YOU going to lend your cousin the money??? Who is? The customers who use these services can’t walk into a bank and get a loan. Banks…oui…let’s compare the salaries of the banking industry to a title lender or payday lender owner’s industry…that comparison right there might turn on your light bulb but that’s an entire other topic.

    REPOSSESSION…Do you know why repossession has started?? The Montana legislature enacted new laws in 2009 making it illegal for Title Lenders to charge interest after a borrower has missed a payment for the 60th day. Forcing the lender to exercise their only option by repossession. (Most do not, how idiotic was this law…even title lenders know the logic that if you take their means of transportation you exacerbate the problem) The government’s and ill-informed public’s involvement has created these necessary high-rate of interest loans because they have backed the lenders into a corner with their idiotic regulation. Don’t blame it on the lender, blame it on the government.

    It’ll get worse…just wait people…the worst is yet to come. When the government regulates an entire industry out of business as well as a majority or attorneys, examiners and workers at the Secretary of States office in Helena because the Division of Banking won’t need these people. OPEN UP YOUR WELFARE WALLETS!

    • simply restating the lie that payday lenders will close up shop when payday interest rates are regulated to 36% will not help your cause anti. every state which has passed payday lending regulation still has payday lenders willing to work within reasonable interest rates and seem to be operating just fine.

      you are advocating raking people over the coals because they are poor. that is just not a popular position with any one i have ever met. it is just too evil to support. in fact, some people will not even consider working for these blood-suckers when they are in dire need of a job:

      http://problembear.wordpress.com/2010/06/05/just-too-evil-to-work-for/

  12. The shame is that this argument worked last legislative session. Legislators folded like cards when the owners of Missoula’s largest payday loan lenders (the one’s that have 5 locations – you know, the smiling brothers?) got up and said that they’d have to close up shop laying off 15 people.

    That is why this initiative is so important. For too long Republican legislators have bowed to the interests of the Chamber of Commerce.

    If they can be regulated in other states and survive and if they can be regulated with regards to loans to our military, then they can be regulated in such a way that treats everyone fairly.

    Anything less is simply government sanctioned mobster-like loan lending without the baseball bat.

  13. the lie is astounding but the fact that our idiot legislature fell for it is even more astounding. anyone knows that customer accounts are gold mines in this business. because of modern data mining ability regarding personal credit, these guys know at the click of a mouse, who will keep paying them vs who will not and they can easily weed out the ones who skip vs the ones who will keep on borrowing from them. plus, the skip rate will decline because the paybacks will be more affordable. combine this with the fact that more people with decent credit will use them and drive up customer numbers because 36% does not look so bad, and you have what is known in the business as “more gold churn” resulting in a steady stream of more income.

    this regulation will turn into gold in the loan business. they can make plenty of money at 36% with a growing base of customers and excellent credit software.

  14. Anti I-164

    Hmmm….interesting logic. Let’s lower the rate so EVERYBODY can afford a payday or title loan. HAHAHAHAHA!!! Let’s put everybody in debt instead of letting people learn that they need to watch their money.

    The current rates are designed for SHORT TERM LOANS! Here’s the lesson…spend too much, take out a SHORT TERM LOAN, pay it back quickly and don’t over spend next time on cigs and movies. Monthly lesson..$100 Title loan + $25 fee = lesson learned.

    It’s what the banks have been doing for years. If you write a bad check, you are going to have a $35 NSF fee….lesson learned…don’t write a bad check!

    There is no logic in making it “affordable” by lowering the interest rates and having the number of people taking out loans go up.

    JHWYGIRL – Most lenders won’t loan to military because of the new law. Please enlighten me with your references to the article where you determined these businesses are all doing just fine in other states. I’d like to see the numbers for myself.

  15. Those are facts anti all you have to do is google them. It’s not my job to educate the willfully ignorant.

  16. Anti I-164

    weak response….willfully ignorant is someone who hasn’t educated themselves on EVERY aspect of the industry, how it truly works, that there is a need, how to help the people who make bad spending decisions, etc., etc. Willfully ignorant is someone who is willing to cut off their nose to spite their face.

    Regulating the industry out of business is willfully ignorant…the alternative would be a happy medium but that just isn’t a drastic enough governmental action.

    • lying that this will put you and your friends out of business won’t wash here anti. other states with these regulations still have payday and vehicle title loan places.

      or are you just afraid you aren’t smart enough to be able to compete with them?

      • klemz

        Um. That’s what happened in Oregon. The law went into effect July 1, 2007 and within a year 3/4 of the brick and mortar payday loan branches were gone. I’ve only seen one in Portland (in the quote-unquote ghetto, of course).

        Let me just say that the urban renewal benefit is worth the relatively minor job loss. Those things really stifle gentrification. Alberta Street and NW 23rd totally blew up when the payday lenders got the hell out.

        • we don’t need to have one on every block. fewer loan places offering 36% microloans will be just fine with most montanans.

          payday lending businesses charging 650% interest increase the deficit by pushing those who are just barely making it into deeper holes that taxpayers and charitable organizations must then rescue.

          this state needs to find imaginative ways to provide a way for people to become self-sufficient. not leave laws in place that enable loan sharks to suck the last pint of blood out of people who are on the edge of financial exinction.

          this current sad state of affairs allows the predatory lenders to offer a few low-paying jobs while they ship the bulk of their exorbitant profits out of state thus leaving the problem of taking care of people they have victimized to montana taxpayers.

          hardly what anyone would call helpful by any measure.

  17. Anti I-164

    Thanks for the info KLEMZ although minor it will not be, not only will the industry disappear but there is an entire division at the State of Montana – Division of Banking department that will be cut by 3/4’s including examiners, and attorneys all the way down to the people who answer the phones.

    Problembear – There you go with your assumptions…don’t assume Im a lender…Im just a well informed voter who has looked at both sides.

    Don’t get me wrong…regulation is good – in fact Im all for it if it’s fair, and completely thought out including the repercussions of the actions. Genocide is not! Wiping out an entire industry is hurtful to the economy any way you look at it.

    We shall see how it plays out…hopefully the mono-vision supporters of this bill won’t brainwash too many voters with their one-sided lies.

    • the only lies i see are the ones that you are paid to spread by the anti christ owners of these despicable places.

      all we have to do here to combat you is just keep restating the truth. and i think you will find that i am very persistent. nobody pays me for this. i do it because i believe it is the right thing to do.

      every state that has brought similar citizens initiatives to a vote of the people has passed easily. anti is just the first of many. these bloodsuckers will pull out all the stops to keep us from getting this passed but history and right is not in their favor and they know it. desperation and lies are all they have to combat us with.

      those are easy to combat. and we are ready.

  18. Anti I-164

    The reason why the citizens have put this on the ballot in other states is because it’s been presented so horribly one-sided.

    Problembear…go back to what you DO get paid for. You have no valid argument on this subject…continue with it and YOU will need a payday loan.

    If the lies you are spreading are true…..this industry is just ROLLING in the dough…we have more…we’ll spend more….we’ll keep fighting….we’ll push back too.

    • see what i mean folks…..
      desperate.

      by the way, anti, that last tirade seemed to include a veiled threat. i would love to give my attorney cause to bring legal action against you and the scum you represent.

      i am glad your industry has a lot of money. you will need it.

      my attorney is excellent.

    • Thomas

      problembear, did you notice? First anti said: “Problembear – There you go with your assumptions…don’t assume Im a lender…Im just a well informed voter who has looked at both sides.”

      Then he said: “…..this industry is just ROLLING in the dough…we have more…we’ll spend more….we’ll keep fighting….we’ll push back too.”

      “We?” I thought he said he wasn’t a lender! Freudian slip?

  19. Anti I-164

    Threat…what are you reading into? I see no threat. Please re-read and maybe it’ll become more clear. “If the lies you are spreading are true”….don’t just pick out the words you like or can make out. Read the entire sentence.

    Your idle threats don’t scare me…my attorney is good too.

    You need to stop blogging…your brain has turned into mush.

  20. skym

    Anti I-164: Your post at 6:42pm today is simply astounding. Your justification for opposing I-164 includes the fact that a state bureaucracy would get smaller because it will have fewer businesses to regulate?! God forbid we do something that reduces government expense, while protecting consumers at the same time!

    • Anti I-164

      Last I checked the employees of the Department of Banking aren’t the ones creating the laws….a job lost is a job lost anyway you slice it.

      And the government expenses you are referring to, the lenders are the ones paying their expenses through the licensing and audits they impose.

  21. Anti is the first of many paid industry flaks who will crawl out of the woodwork to try to stop the rate cap they will spend a million or more to fight this until november.
    Brace yourself and keep on shining the light of truth in their eyes. They hate light. Like roaches they scurry away when confronted with the truth of their unbridled greed.

    in the months ahead, it will get rough but I am confident that montana will shine through in the end.

  22. Chuck

    PB, if this asshole Anti keeps it up I will provide you with some inside information on the ties of these scumbag loansharks to their casinos, liquor stores and convenience stores. It is their business plan to keep the poor hooked on cigs, booze and gambling and then loan them the money to do it.
    Keep up the good work.

    • thanks chuck. gather your espionage and post it all in a comment here chuck. why give me all the credit?

      looking forward to it very much.

      by the way- i have noticed in the year and a half that payday lenders have been arguing with me, most of them are posting from las vegas nevada where there is NO LIMIT on what a payday place can charge you.

  23. Anti I-164

    Ohhhhhhh….name calling…ouch! Not all of the voters are as blind eyed as you few neanderthals who have to resort to name calling. You have given a really poor argument to support your stand that lenders are all bad. (by the way, I am a born and raised Montanan, I am not paid by the industry, I am not a lobbyist and I do not work for a lender)They provide a necessary service and the lawmakers haven’t taken a spherical look at the repercussions of the garbage they are feeding the public. Obviously you Chuck and problembeardroppings are also part of the ill-informed.

    • name calling? you called me a whore – I didn’t say anything to you.

      You sound bitter. Good luck with that.

      • jhwygirl- i have been told by the S.O. that i can have that effect on people from time to time….:)

      • Anti I-164

        No..no..no..I didn’t call you a whore. I was referring to my lack of blog stamina because I am not one that wastes my time on blog sites. Simply referring to your post when you wrote this “We’ll see how long you stick around.”

        There you all go again…thinking the worst or people.

    • mr anti-christ: please explain these two statements- (quotes are your words on this post)

      exhibit A

      “..this industry is just ROLLING in the dough…we have more…we’ll spend more….we’ll keep fighting….we’ll push back too.”

      exhibit B

      “I am not paid by the industry, I am not a lobbyist and I do not work for a lender)”

      and take your time…….we have all night.

      follow up question:

      are you lying in exhibit A or are you lying in exhibit B?

      • Anti I-164

        Neither…
        Please don’t paraphrase my statements…my statement was…”If the lies you are spreading are true…..this industry is just ROLLING in the dough…”
        YOU ARE SPREADING LIES! This industry is not rolling in the dough…you make lenders out to be that though. (sarcasm, who knew it was such a tough concept to grasp)
        “We” meaning I am in support of the lenders…like I said… I am a born and raised Montanan, I am not paid by the industry, I am not a lobbyist and I do not work for a lender.
        I have looked at both sides and this bill is not the answer.
        Peace out….

        • i thought so anti-christ.

          you look at both sides of the checks you cash to spin this garbage. i hope they are paying you plenty for this ass-kicking.

          cause you suck at it.

  24. christycricket

    I understand first hand the damage these loans can do. I am working very hard to pay them off. I wish that something would have been put in place to protect those people who currently have these loans, because now they are going after us to get their money sooner. They are afraid of going out of business and not getting all their money including the intrest. So for example I got in over my head with these loans when my husband got laid off and have been paying them off 1 at a time. I am no longer allowed to do this I have to pay on all 4 loans(same company) at once. This is really hurting my family right now alot more then if I could have just kept making payments and renewing my loans. I do understand that doing it this way was or is costing me 3 times the loan amount but that is better then what we are going through now !!

    • christy- what you are going through with payday lenders sounds atrocious and illegal. i would suggest you take all of your loan contracts to a counselor at W.O.R.D. in missoula and have them take a look to make sure that what this lender is doing to you is even legal. word can be contacted here: http://wordinc.org/

  1. 1 Payday Loan Lenders Porn « 4&20 blackbirds

    […] it isn’t the initiative that has these guys running scared, it’s a problembear, who is doing battle with one of their paid lobbyists in pb’s most recent post here at […]




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