A recent report by the Federal Reserve Bank of New York has finally brought to light hard evidence to dispel the idea that payday loan providers are engaging in ‘predatory lending’ practices.

The report (available here) offers the results of a study of households in Georgia and North Carolina, two states which banned payday loans in 2004 and 2005, respectively. Compared with households in other states, those in both Georgia and North Carolina recorded more bounced checks, more complaints about lenders to the Federal Trade Commission and filed for Chapter 7 bankruptcy at a discernibly higher rate.

The report authors attribute this rise in credit risk and penalties to the decrease in responsible credit options available to sub-prime consumers. In the 2-3 years since payday loan lending was banned, consumers in these states have great financial challenges with far fewer options.

When these laws were enacted, the Center for Responsible Lending (CRL) estimated it would save consumers $154 million per year in loan fees and interest. What they neglected to take notice of, is that the fees for bounced checks, credit late fees and NSF charges outweighed the fees for responsible payday loans – leading GA and NC residents not to save hundreds of millions, but instead pay millions more in penalties.

Luckily, most states recognize the benefit of cash advances and payday loans for their citizens’ short-term money needs. While these cash advance options should not be used as long-term financial solutions, they are one responsible option for consumers to face immediate money needs without paying unnecessary late fees or overdraft penalties.

Click here for more information on online payday loans.

As more states attempt to pass legislation that puts interest rate caps on payday loans and cash advances, the debate continues on what is best for American consumers.

A recent article out of the Bakersfield Californian reviews the state of affairs in California. As certain lawmakers try to put potentially devastating caps on payday loan lenders, it may hurt some consumers’ access to lending options.

“For most of our customers, some adverse event is going to happen.” said Thomson, who also serves on the state trade association’s legislative committee. “They are going to bounce a check, or their utilities are going to get shut off, or they have to get a car out of the shop so they can get to work.

“There’s already something about to happen to them, and they’re trying to find the cheapest way they can to manage it.”

Thompson argues that licensed cash advances can be a great option, especially for customers with poor or no credit history, who are not eligible for more traditional bank loans. When used in a responsible way and repaid in a timely fashion, these payday loans can help consumers with immediate money needs or unforeseen emergencies.

However, as more legislatures push for interest rate caps, the payday loan providers are being pushed out of business due to default rates and the cost of operating at such a low profit point. Without payday loans, many consumers would face defaulting on credit cards, utility disconnection or having to borrow from less-respected lenders.

Recently, several states have implemented payday loan interest-rate ceilings reducing customer access to expensive payday loans. At first, this legislation on the payday loan industry might seem in the payday loan customer’s favor, but really, ceilings on payday loan interest rates may hurt low-income families reliant on payday loans when unexpected expenses arise.

In his article, titled “Usury Ceilings Hurt Low-Income Families Most,” Ph.D. J. R. Clark writes, “The availability of even expensive short-term credit enables consumers to survive financial and other “shocks” that would otherwise cause them to seek bankruptcy protection, leave the workforce, or forgo crucial purchases, including medical care or auto repairs essential for a worker’s commute.”

Without access to payday loans, much of the under-banked community would be left to struggle with emergency expenses that could be taken care of with a payday loan.

As payday loan interest rate ceilings are introduced, many payday loan companies are forced to drop out of states where they previously did payday loan business. This reduction in access to payday loans can force payday loan customers to borrow its payday loans from unregulated and unlicensed payday loan companies. Dealing with any unlicensed company is always risky whether a cash advance or payday loan is involved or not. When payday loan companies are not licensed, their payday loan interest rates may be several times higher than licensed payday loan companies.

Ph.D. J. R. Clark goes on to write that there is significant academic and market evidence that high-interest lending such as payday loans increases the welfare of borrowers. To view his entire payday loan article, click below:

Ph.D. J. R. Clark’s Article

National Public Radio has for decades been heralded as one of the last outposts of unbiased news gathering in the US media. Not surprising then, that one of the most popular news programs, “Marketplace” took an eye-opening look at the truth behind payday loans and how are serving American consumers.

The report was an honest look at how payday loans have become a responsible and necessary form of lending for millions of Americans that need financial relief between paydays. Completely unbiased, the reporting provided all sides of the story, not merely the unsubstantiated view of payday lenders as ‘loan sharks’, which is a popular, if completely uncredited, viewpoint put forth by several ‘consumer advocacy’ groups.

The report, which you can listen to here, took a look at how consumers in states such as Georgia and North Carolina have fared since regulations forced payday lending out of their state. With few, if any, fast cash or legitimate cash advance solutions, consumers in these states paid nearly $38 million in bounced check and account overdraft penalties last year.

The piece came not only as a fair view of how payday loan and cash advance lenders are providing easy and responsible financial options to American consumers, but also as a warning for states that may be pushing for increased lending restrictions in the near future.

A recent report by the Federal Reserve Bank of New York has finally brought to light hard evidence to dispel the idea that payday loan providers are engaging in ‘predatory lending’ practices.

The November report (available here) offers the results of a study of households in Georgia and North Carolina, two states which banned payday loans in 2004 and 2005, respectively. Compared with households in other states, those in both Georgia and North Carolina recorded more bounced checks, made more complaints about lenders to the Federal Trade Commission and filed for Chapter 7 bankruptcy at a discernibly higher rate. And they did so at a higher rate than before Payday Loans were banned.

The report’s authors attribute this rise in credit risk and penalties to the decrease in responsible credit options available to sub-prime consumers. In the 2-3 years since payday lending was banned, consumers in these states have faced greater financial challenges with far fewer options.

At the time that these laws were enacted, the Center for Responsible Lending (CRL), a consumer advocacy group, estimated that the law would save consumers $154 million per year in loan fees and interest. What they neglected to take into account is that the fees for bounced checks, late credit card payments and NSF charges far outweighed the fees for responsible payday loans – leading GA and NC residents not to save hundreds of millions of dollars, but instead pay millions more in penalties.

What most financial experts already know – and, unfortunately, more and more consumers and state legislatures are learning the hard way – is that the unwarranted criticism that is incited by so-called ‘consumer advocate groups’ is often based on unfounded, if not downright misleading, evidence.

Companies, such as CashNetUSA, pride themselves on providing a responsible short-term lending option to those in need. This recent report by the Federal Reserve of New York will hopefully go a long way in dispelling much of the slander that is brought upon the industry.

How do you know who to trust with your emergency money needs?

A recent federal court case has once again turned the spotlight on under-licensed or dubious lending practices in the short-term loan industry. The result of the case – which found a specific loan company in violation of offering services in a state where it was not licensed – has brought the case for state-licensed lending to the forefront of news and legislation.

In the payday loan industry, companies can use one of three business practices to offer their services:

1. Offshore – An obviously dishonest practice, some companies set up in foreign countries and use legal loopholes to service customers in the US without any form of regulation or legal recourse for unsatisfied customers.

2. Choice of Law – The majority of payday lenders become licensed in a single state, while offering services to consumers beyond that state’s border. That means you could be a resident of Illinois, but be borrowing money from a company established in Utah that does not have to follow the laws and regulations that your legislature has put in place for your protection. The decision from this latest federal case, however, is spelling out the end of these less-than-honest lenders – forcing them to become licensed in more states or be run out of business in favor of fair and honest lenders.

3. State Licensing – Regarded as the most transparent and consumer-focused business strategy, companies relying on the State Licensing methodology actually apply for and are approved by every state in which they do business. This ensures that their customers are receiving full protection from their own state legislature, that the lender is allowed to charge only acceptable fees and must face repercussions if consumers are unhappy with their services. Though State Licensing is the best strategy for consumers, it’s also beneficial for the lender itself – ensuring a long and happy relationship with customers and permission from the state to serve as an accepted financial service.

As Offshore and Choice Law are slowly but surely being pushed towards State Licensing or out of business, current State-Licensed companies such as CashNetUSA are thriving on the successful and fair lending practices which they stood behind all along. With approval for lending in over 30 states, CashNetUSA has become the leader in online payday lending through safe and secure practices, customer-forward services and smart business decisions.

As always, it’s important to know who your personal lender is and what regulations they follow. When you are in need of emergency cash, rely on the lender that has always been, and will forever be, dedicated to the most fair lending services – CashNetUSA.

Payday loans, and those who lend them, have traditionally received a bad – and often undeserved – rap from much of the mass media. The majority of this bad publicity seems to come from biased or generally invalid sources and are meant to push consumers away from short-term loan options and towards high-rate credit card lenders.

But new reports from some of the very sources that have blasted payday lending in the past, show a more complete understanding of the role and benefits of these quick and secure loan options.

In January, the Federal Reserve Bank of New York released a report stating that not only were payday loans not considered predatory lending, but in fact they served to enhance the welfare of thousands of underbanked households (read the article here: “Defining and Detecting Predatory Lending,” by Federal Reserve Bank of New York Research Officer Donald P. Morgan).

A similar study has shown that the actions of several state legislatures, designed to chase off these short-term lenders, has actually led to fewer credit options for their citizens, not to mentioned decreased the amount of competition in the lending arena, thereby increasing the fees passed on to consumers (read: “Payday Lending and Public Policy: What Elected Officials Should Know,” by Tom Lehman of the Indiana Policy Review Foundation).

The lesson is simple: it’s important to understand all sides of a debate before making a decision. It’s also vital to know whether or not the sources of the information you find are credible – Federal Reserve Banks, reputable news gathering agencies or government institutions tend to offer the most unbiased information. The more you know – the more equipped you will be to find an honest and trustworthy loan option.

CashNetUSA operates within the regulatory standards that banks, credit card companies and other financial institutions must adhere to most states.

But what about using the Internet to transact money? Actually, your bank, employer and most of the companies you do business with are all already using the same technology and systems used at CashNetUSA for sending money electronically. The system is used to move billions of dollars every single day.

The security, privacy and confidentiality of all your information are protected by similar, best-in-class systems. When you transact a loan online, you’re protected from prying eyes far away; since no faxing or phoning is necessary (unless you chose to call a customer service representative), no one in close proximity needs to see your financial business either.

Now America’s most trusted payday loan lender is available to British consumers as well.

On Monday, July 16th, CashNetUSA launched its first UK cash advance site, QuickQuid.co.uk. Now consumers across the pond will be able to receive the same quick funding, premier customer service and secure transactions that CashNetUSA.com users have enjoyed for years.

The process for lending in the United Kingdom is much the same: customers apply in minutes on the new QuickQuid website, receive instant approval and, due to UK banking regulations, can receive their loan in as quickly as same-day.

The UK market promises to be one of growth. Payday loans are as of now a virtually untapped resource for UK consumers. With its fast funding and ease-of-use, QuickQuid.co.uk is hoping to make easy cash advances more accessible to these British customers.

Since its inception, CashNetUSA has revolutionized the payday loan industry with fast and easy payday lending options available from your own home. Much of our success has come from our dedication to easy cash advance options, superb customer service and innovative rewards programs.

But even a dynamic and growing company like CNU relies on smart, strong partnerships to get our name on the streets. For this reason, we have developed an incredibly successful affiliate program designed to reward our partners for spreading the word about our fast and secure payday loan services. Our affiliates benefit from a strong marketing program and one of the most trusted names in online lending. We benefit from partnering with smart professionals who help our business grow.

If you are a dedicated marketing professional and would be interested in earning great rewards by supporting the payday loan industry, please click here to learn more.