Payday Lending in Louisiana
Together Baton Rouge
A presentation on Payday Lending in Louisiana. Provided at the Together Louisiana Statewide problems Conference on 15th, 2014 february.
Function as the very first to such as this
- 1. Payday Lending in Louisiana Statewide problems Conference February fifteenth, 2014
- 2. whom? HOW? WHAT?
- 3. Whom Uses a Pay Day Loan?
- 4. Families with kiddies making $15,000 — $40,000 per year Disproportionately AfricanAmerican or Latino bad Credit History want cash that is extra emergencies and fundamental cost of living Social Security Recipients
- 5. just just How people simply take down payday loan in Louisiana?
- 6. Payday really loves Louisiana 23percent of Louisiana households depend on predatory financing 6th greatest within the country US typical: 18% About 57,000 Louisiana households sign up for loans that are payday year supply: Louisiana Budget venture
- 7. Payday Enterprize Model
- 8. Payday company Model Billions & billions served # of McDonalds # of Payday stores 12,800 20,600 230 936
- 9. Payday enterprize model = repeat that is multiple additionally the financial obligation trap. Many payday advances go to вЂњimmediate repeat borrowersвЂќ New loans made within a bi weekly duration 76% Loans to one-time users 2% Initial loans to duplicate users 11% brand brand brand New loans after 14-30 day pause 6% brand New loans after 30 time pause 5%
- 10. Payday enterprize model = repeat that is multiple plus the financial obligation trap. Many revenue that is payday from вЂњmore loans per customerвЂќ
- 11. Payday enterprize model = numerous perform loans therefore the financial obligation trap. Into the their own words вЂ¦ вЂњIn any large, mature pay day loan profile, loans to duplicate borrowers generally constitute between 70 and 90 % for the profile, as well as for some loan providers, a lot more.вЂќ вЂ“ Community Financial Services of America (leading industry trade association that is payday
- 12. Payday enterprize model = repeat that is multiple while the financial obligation trap. Into the their very own words вЂ¦ вЂњThe theory in the industry is you have got to get that customer in, work to turn him in to a customer that is repetitive long-lasting consumer, because that’s where in actuality the profitability is.” вЂ“ Dan Freeman, CEO of money America
- 13. Debt Period
- 14. Interest Rates apr (APR) Average 30-year mortgage scholar Loan Auto Loan Sub-prime home loan Credit Cards PAYDAY ADVANCES as much as 5% 8% 2% 8% 12% 23% 8% 15% 15% 36% 150% 782% supply: Louisiana Budget venture
- 15. How exactly does this work? ? ? ? ? ?
- 16. Just exactly How payday advances carry triple digit APRвЂ™s Payday Loan Amount $100 + Interest ____+ 16.75%________ Amount owed = $116.75 https://personalbadcreditloans.net/reviews/lendgreen-loans-review/ ____16.75 percent X 26 Two-week periods Two-week durations 1 = 436% APR Plus fees of $10 PER LOAN brings APR to 696% year!
- 17. Supply: Louisiana Budget Venture
- 18. Those who remove a quick payday loan are as very likely to seek bankruptcy relief as individuals REJECTED for cash advance of men and women in BR who seek bankruptcy relief achieve this, in component, because of pay day loans Payday borrowers are because very likely to have filed for bankruptcy in final five years supply: Louisiana Budget venture
- 19. Payday hurts our economy cash used charges and interest is cash lost to Louisiana families and state economy Amount in payday costs and interest removed from Louisiana families PER 12 MONTHS (2011 numbers) $196,394,987 supply: Insight Center for Economic developing, вЂњThe Net Economic Impact of Payday Lending within the U.S.вЂќ, 2013
- 20. Payday hurts our economy web jobs lost ANNUALLY due to economic effect of payday financing 671 jobs lost (each year) supply: Insight Center for Economic developing, вЂњThe Net Economic Impact of Payday Lending within the U.S.вЂќ, 2013
- 21. Where are pay day loan stores within my town?
- 22. Alexandria # of payday loan providers 29 Source: Louisiana Budget Project
- 23. Shreveport / Bossier City # of payday loan providers 78 supply: Louisiana Budget venture
- 24. New Orleans # of payday loan providers 45 supply: Louisiana Budget venture
- 25. Monroe # of payday loan providers 30
- 26. Lake Charles # of payday loan providers 30
- 27. Lafayette # of payday loan providers 39 supply: Louisiana Budget venture
- 28. Baton Rouge # of payday loan providers 85 (State Capitol of Payday) supply: Louisiana Budget venture
- 29. just just How did this take place? вЂў Louisiana has вЂњusury lawsвЂќ, preventing loans with interest levels more than 12%. вЂў Louisiana legislature passed a legislation in 1990s EXEMPTING payday loan providers from usury guidelines (вЂњLouisiana Deferred Presentment and Small Loan ActвЂќ) вЂў Legislature passed a legislation this year INCREASED that is allowing FEES pay day loans. (that do you believe theyвЂ™re hearing from?)
- 30. What exactly are other states doing? GEORGIA Regulates payday lending through legislative action: limit at 16% APR interest. вЂ“ The regulation reduced the amount of individuals whoever bank reports had been involuntarily closed as a result of repeated overdrafts by 11-16 % ARIZONA this year, passed a limit of 36% APR, which especially relates to payday advances.
- 31. Exactly what are other states doing? ARKANSAS State Supreme Court ruled that Payday Lending violates state usury rules вЂ“ last lending that is payday left their state last year. VERMONT Regulated payday loan providers in 2006 through legislative action. вЂ“ Families spared nearly $100 million/year вЂ“ Former borrowers reported an effect that isвЂњpositive on the individual funds
- 32. Exactly what are other states doing? TEXAS Taking a city-by-city approach Dallas that is, San Antonio, and El Paso manage where payday lenders operate, exactly exactly just how they issue loans and whatever they charge in interest and charges. WASHINGTON STATE вЂ“ Capped the number that is total of loans which can be lent to any person from any business at 8 each year. вЂ“ quantity of yearly loan that is payday fell from 3.2 million to 856,000.
- 33. вЂњMilitary Lending ActвЂќ (2007) Prohibits payday loan providers from billing APRвЂ™s above 36 per cent to active armed forces workers and their dependents. вЂ“ The Pentagon unearthed that armed forces personnel collectively paid over $80 million of these salaries toward costs every year. вЂ“ Department of Defense: вЂњPredatory lending undermines army readiness, harms the morale of troops and their loved ones, and enhances the price of fielding an all volunteer fighting force.вЂќ
- 34. You will find options to Payday! Examples: Louisiana Federal Credit Union provides affordable, short-term loan item: вЂ“ $300 loan, with maximum of 15% APR. ASI Credit Union provides вЂњStretch LoanвЂќ of between вЂ“ $200 to $500 loan, with 12per cent APR. MORE PEOPLE usage alternatives in states that control Payday Lending
- 35. HOME MEETINGS Share a whole tale regarding how financial obligation has impacted you or some one you realize?