General  »  Ask the PLA your questions

Use this discussion to ask the PLA questions about the predatory lending industry.

Josh,

This forum is intended for predatory lenders to discuss lending opportunities. Please review the myths vs. reality of payday loans and refrain from further comments on our industry.

Why no sections on College loans? Who better to exploit and steal from than idiot youngsters just newly on their own. They'll sign anything! And if the Credit Card has the mascot of the school on it, they'll pressure their stupid friends to do it too. Really, can we explore this more? Or has Sallie Mae cornered the market on stealing from children?

Hi there-
Thanks for your work, this is a very useful site. I'm the proprietor of a PDL provider with two branches (soon to be three!) in Gresham, OR and I had a few questions.
First - there is some hippy representative making waves about capping PDL interest at 36%, as I hear has happened in some other states. If this happens in Oregon, can I still loand money at 36% and then roll it over repeatedly, so that I end up getting my 300-400%? Or does that mean that the interest assessed over the course of the entire year cannot exceed 36%? Pardon me if this is a "newbie" question, I really don't know much about finance, I got into this business by buying a franchise after I sold my Subway store.
Second - I've had some problems with my employees trying to bend the rules for some of my borrowers, do you have any advice on how to handle this? For instance, last week I found that one of my employees tried to alter my records to extend a borrower's loan, WITHOUT applying the usual fees and assessing new interest. Apparently the borrower had some sob story, single mom, lost job blah blah, and my soft-hearted (soft-headed too) employee bought it, and thought she was doing the borrower a favor. Needless to say, the employee is now fired, the borrower got the correct term adjustments, and both are targets of a civil suit for breach of contract, as well as libel and emotional pain & suffering, but I'd really rather just avoid this kind of thing entirely in the future. Any hints? I already have an employee handbook I give to new hires about all the whining they will encounter, but some of these little ATMs (that's what I call the borrowers, heh heh) can be very persuasive.
Third - I applied to the OLCC (Oregon Liquor Control Commission) for a license to sell cigarettes and beer on premises, and it was denied - apparently, it would violate all kinds of different state regulations, because Oregon is very tight-a$$ed about that stuff. Can you recommend states where this would be legal (I'm guessing Texas)?

Thanks a $Million!

Bob Roark

Worthy site. Sad that some commenting here don't get the satire. I also find it sad that one lender justifies his/her actions saying the market accepts these rates. Do you really think the people taking PDLs understand the rates and fees they are being charged and how it can snowball them into bankruptcy? They are not sufficiently educated on financial matters to really understand what they are getting themselves into. Same goes for many people who refi'd for temporarily low rate ARMs. You can disclose all you want on loan forms, in bold letters, etc. but if someone has a strong enough desire for something they'll just overlook the warnings and sign. Should government protect the borrowers? I don't know - I'm not a fan of big government - but if not government, then who?

So, instead of believing CRM or CFA, we should believe what the PD lender companies are saying??? So, how does that provide more neutral POV? At least CRM and CFA doesn't profit from ppl not doing PDL. It's like asking drug dealers if drug abuse is a problem. Yeah, let's go ask PD lenders if they're causing problems. what a dork.

I think <i>everyone</i> should go to the nearest Payday Loan Store today and take out the maximum amount the store will give them. Then, in two weeks, when the loan is due, <i>everyone</i> should just refuse to pay the money back!

Let's break these PDL Shylocks once and forever; after all, they can't sue <i>everyone</i>.

But remember, this idea will only work if <i>everyone</i> participates. So, come on, America - United We Stand!

This site is hilarious, bravo!

However, people who need payday loans need to start living within their means. It's ridiculous.

As long as an animated caterpillar tells me it's OK, it's OK.

I've quite enjoyed the past hour reading through the site. Although it took awhile to realize it was satire I felt as though it was educational nonetheless.

for guest (1 day before this)

In answer to your 3 questions:

one
- by selectively applying &quot;dont ask, dont tell&quot; you can easily squeze out of such discriminatory Big Brother legislation. No biggie really as long as long as such legislation is intended to 'protect' a specific group of people.

two
- fire the bitch, (And take the missing fees out of her separation pay). You could even sue her for damaging your reputation, but I dont recommend that unless you live in a very blue state.

three
- alas no. But thank you for the idea, it could be most profitable, particularly if we add gambling on the premises too. Maybe offshore or Barbados :-))

Ian, sorry to say, but most of them do NOT clear. 80%, in fact.

No sales techniques are necessary. Customers come in by virtue of their own choice. Your best bet for keeping them and not losing them to another lender is to be honest, courteous, and respectful. Most importantly, tell them that rollovers are NOT permitted by Advance America and in several states, including Ohio.

That way, they won't get confused like some activists do that lenders "depend on rollovers". Because that would defy logic. You know, if it costs a customer $15 per hundred, that means they need to roll the loan over 6 times in order to make any money once they default on the initial $100.

Just remember, it isn't about ignoring humanity. It's about ignoring facts, logic, how markets truly work, and understanding the business you are criticizing.

But don't let any of those things bother you.

Gotta love the payday lending argument: "Well, lots of people use these loans, so they MUST be good!"

Lots of people use meth as well (by choice even!). That doesn't mean it's a good thing.

And don't even get me started and that ricockulous NY Fed study they keep quoting -- that thing is more flawed than the Miami Dolphins offense.

If anyone wants to know the way these goons operate, check out <a href="http://www.dailypress.com/news/local/dp-news_whistleblower_1026oct26,0,3912967.story">this story.</a> These folks are like <em>The Firm</em>, but with loan sharks instead of lawyers.

They're feeling the heat, and it's hysterical to watch them squirm.

Dear PLA-

Thank God for you guys. I was too financially stupied to understand what a payday loan meant to me and my family before you came along. Now I can rest easy, knowing you're out there protecting me and all other clueless payday borrowing Americans with your biting satire, stinging rhetoric and Microsoft pedigree-- which undeniably makes you infinitely more intelligent than I or my po' folk ilk could ever be.

God bless you! United we stand!

Miriam Taylor
Valencia, California

How should predatory lenders react to Mike Donovan's Washington D.C. testimony where he publicly exposed our business practices? How should we react to this traitor?

Jeff - that guy in Washington, DC was just a regional manager. He doesn't represent our whole organization or industry. I know he got the city council so wound up with that testifying that they got rid of our model a few months back, but if we stick to our focus on national legislation and make sure the state law pre-emption clause gets in, we'll be ok.

Dear PLA:

I think you are right on the mark. I want to help consumers meet their short term emergency needs. Is there a way I can offer them a short-term loan that is totally unsecured and provides maximum risk to my capital? I just don't think 36% is low enough.

It's really important to me that I not be able to meet my monthly store expenses while doing this, so I want to make sure that arbitrary 36% number the federal government and activists use isn't too high.

Let me know how I can go bankrupt as quickly as possible and force consumers who need short term loans to spend MORE money by bouncing checks.

And please include studies from the biased North Carolina Responsible Lending Coalition to back it all up.

> Hey PLA --
> Why not rebut today's article here:
>
> http://www.fool.com/personal-
> finance/credit/2007/11/16/battling-for-payday-loans.aspx
>
> Or maybe you can drop the sarcasm and come up with
> cogent respnses to:
>
> www.paydayloanfacts.org

I just read the information at www.paydayfacts.org, and I was SHOCKED! Do you know that 5% of the borrowers default on their loans? And that I have to pay startup costs in order to run my payday loan business? Instead of trying to cap our payday loan interest rates, we should be lobbying our government to do something more supportive of our industry, like subsidizing our startup costs, and allowing us to harvest the organs from borrowers who default on our loans (yes, harvested organ sales are also banned, but perhaps we can get the government to change that too). Just thinking outside the box ...

Thurston Howell IV
President and CEO,
Friendly Neighborhood Payday Loans, Ltd.

> Guess there's no point in discussing the issue
> seriously with you, since you are just a clown that
> like to write his own funny lines in near-obscurity.

Said by someone who also posts under the name "guest" ...

And I can't speak for anyone else who posted under the name "guest", but I'm not the operator of this website. I may not be "the PLA", but I did look at the links at www.paydayloanfacts.org (a propaganda site if ever there was one) and www.fool.com (more Fool than Motley in that post). And I think that anyone who whines about a 5% default rate and having to actually pay startup costs (gasp!) is the one who isn't being serious.

Finally, call me a clown if you will, but I'm a proud predatory lender by trade. Being a clown is only my hobby.

Thurston Howell IV
President and CEO,
Friendly Neighborhood Payday Loans, Ltd.

I was hoping for more information on how I could get started in the PDL industry. I found the Poor Finder tool useful, but what about more information on how to get started? I feel you guys are a closed society and don't what to support any newcomers. Isn't there enough to go around?

I passed a link to this site as a tip to the consumerist:

http://consumerist.com/consumer/funny/join-the-predatory-lending-association-326528.php

You're in trouble now PLA!

Hi, I'm a PDL, and just to help my fellow operators, I found that organ harvesting is diminishing returns and does not provide for future income. There's no "rollover" there. Instead, we started having borrowers pre-endorse their plasma, sperm, and ovum donation payments over to us. In fact, white college girls' ovum are worth a lot more (the fertility clinics pay higher) so we're willing to make bigger loans if they pledge their eggs. That makes them very happy.

You don't want to kill the goose that lays the golden eggs. Get your attorney to help rewrite the contract and start really reaping some juicy bioprofits.

If the Democrats take the Presidency in 2008, we could all be in big trouble, given that they manifest the quest for HUGE government and entitlements to all.

Wow...just reviewed this website while working on a plan to encourage the state of Ohio to proceed with some legislature that will either put the end to PDL establishments or, at the very least, allow for an "opt-out" for those middle class "working poor" to get out of the rut they have gotten themselves into.

It's a bit scary...am I to be honest or satirical?

Here goes my satire...
I love my PDL place. I visit at every two weeks. It is clean and they even offer me coffee, cookies, tootsie rolls, and, sometimes, boxed Hostess donuts. I was actually even offered the opportunity to get a credit card! Who cares that the fee was half the limit. The gals there are so nice..."What are you doing this weekend?". My reply: "I am going to try and make a meal out of the cans of creamed corn and kidney beans in my pantry (as the pantry is bare). Then I am going to figure out the minimum payment due before shut off on my utilities and how much longer I can put off my car payment before they reposess."

I just paid those "sweet people" $200.00 in interest of the $400.00 my husband and I pay them per month. If I had the $6,000.00 that I have paid them over the past year and a half, I would probably buy them a nice gift to thank them for "bailing me out" and, maybe a dozen really good cookies.

I am in the rut. I am not stupid, though some may disagree. My brother and daughter, who keep encouraging my husband and I to "stiff" those "nice" people, would, perhaps question my intelligence. I, on the other hand, feel a responsibility to contribute to the refreshments, the paychecks of those "nice ladies", and help pay for the debt that other borrowers did not repay.

I encourage anyone in the same position as I to write their legislators and propose that PDL establishments be permitted to raise their interest rates and hound their debtors - whether it be calling their employers, following them around...whatever. I also propose that the PDLs be forced to offer better donuts and Dove dark chocolates. Come on, an additional 100% may also entitle us to a breakfast omelet.

Help ban Predatory lending. Help yourselves. Help preserve the middle class. Help the poor working soul.

By the way...if you write your representatives regarding predatory lending, let them know how you feel about credit scores impacting insurance rates (I have seen car insurance increase by 50% due to credit). I say that those with poor credit should pay even more for car insurance, that way, when their insurance payment is due, they can drive (very carefully to keep up their great driving record) to the nearest PDL to borrow the money they need to drive legally. That way they can get to work,collect their paychecks, and pay the PDL.

No, they didn't take me forcefully, like a slave or indentured servant. Yes, I was stupid. Yes, I am still stupid for paying them. I agree with the one post (what's his name?). Everyone should "stiff" them. I just wish that I wasn't raised Catholic. :)

Oh well...I'm on to bigger and better things for now.

Thanks for letting me vent.

<a href="http://www.southerncashadvance.com/texas/texas-payday-loan-question.html">Texas Cash advance loans</a> are legal in Texas. The law also requires them to display a notice containing the payment time intervals and the loan agreement. The good news is that in Texas, lenders are prohibited from loan-splitting, or the separation of one loan into two loans for the reason of charging interest on both.