Payday loans face scrutiny

By Patrick Anderson
PBN Staff Writer

Modern payday lending was legalized in Rhode Island in 2001 and didn’t cause too much outcry until the recession began adding to the number of local families falling deeper into debt and bankruptcy. More

To continue reading this article, please do one of the following.



LAW

Payday loans face scrutiny

PBN PHOTO/NATALJA KENT
MONEY ON HAND: Advance America Assistant Manager Jocelyn Docouto, left, speaks with customer-service representative Sylvie Depina. The company has 19 R.I. locations.
PBN PHOTO/NATALJA KENT
CASHING OUT: Advance America, the largest U.S. payday lender, says most of its customers understand the loans they are taking out.
Photo
1
2

By Patrick Anderson
PBN Staff Writer

Posted 2/4/13

Modern payday lending was legalized in Rhode Island in 2001 and didn’t cause too much outcry until the recession began adding to the number of local families falling deeper into debt and bankruptcy.

Now for the third consecutive year, a coalition of lawmakers, social-service organizations and religious leaders are trying to outlaw the interest that payday lenders charge, calling it onerous and predatory.

As they did the past two years, the coalition faces an uphill battle getting a bill, sponsored by Rep. Frank Ferri, D-Warwick, approved on Smith Hill. Similar bills have died without a floor vote in the past and neither House Speaker Gordon D. Fox, D-Providence, nor Senate President M. Teresa Paiva Weed, D-Newport, have signaled any change in their positions from last year.

But each year the coalition has added a few new members and focused additional scrutiny on payday lending in particular and short-term, distressed borrowing in general.

In response to the anger over payday lending, some Rhode Island organizations have launched their own nonprofit-oriented, short-term loan programs, including the Capital Good Fund, West Elmwood Housing Development Corp. and Navigant Credit Union.

But payday-lending companies say these alternatives are not truly accessible for the majority of people in the state facing an immediate cash crisis without good credit.

The real alternatives their customers would turn to, they say, include unregulated Internet lenders, credit cards, pawn brokers, neighborhood loan sharks, bank overdraft fees, check bouncing and missed monthly utility payments, all of which can come with higher costs than their products.

“The misunderstanding is folks fail to look at the broader marketplace and compare the characteristics of other products,” said Jamie Fulmer, senior vice president for public affairs at Advance America, the largest payday-lending company in the United States and Rhode Island.

Next Page
Calendar
PBN Hosted
Events

Two Great Programs...One Great Event. PBN's Annual Celebration of Growth and Innovation is now underway. 2014 applications are now available. Deadline August 1st.
  • Healthiest Employers
    Celebrate with the Healthiest Employers in RI on August 14th at the Providence M ...
  • 40 Under Forty
    Thank you to our sponsors and to all those who attended the 10th Anniversary of ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement