Payday Loan Limits May Cut Abuse but Leave Some Borrowers Searching

Payday Loan Limits May Cut Abuse but Leave Some Borrowers Searching

CANTON, Ohio — This town of 73,000 is well known for some things — the Pro Football Hall of Fame, the presidential collection of William McKinley, a lively downtown arts scene.

However in banking groups, this has gained a far more reputation that is distinct Canton is really a nexus of this payday financing industry, for which those that have difficulty making ends satisfy from 1 paycheck towards the next sign up for high-interest loans from specialty loan providers.

On 30th Street, a half-dozen payday lending outlets encircle a popular mall, and also at lunchtime they draw a reliable audience of clients. During the Advance America shop, Martin Munn stopped in recently along with his daughter that is young to their biweekly banking: Nearly every payday, he cashes their check, takes care of their final loan in complete and removes a fresh one against their next paycheck. The quantity he borrows varies, however it is typically around $500, which is why he will pay a charge of $73 — a 380 % interest rate that is annual.

The girl whom manages the shop, Tanya Alazaus, greeted Mr. Munn with a grin. The store seems like a little bank branch, with clerks waiting behind counters to undertake deals and talk to their regulars. Mrs. Alazaus views by herself as a family merchant that is local.

But regulators that are federal her and companies like Advance America quite differently: as an element of a predatory industry that is ripe for reform and a crackdown.Continue reading