Oct 21 2014

Payday Loans and Check-Cashers Charge Exorbitant Fees; Consumers Are Aloof

NEW YORK — Consumers are missing an easy opportunity to save money: Avoiding high-fee loans and check-cashing services. And some dont even know why, a survey says.

Despite TD Banks Checking Experience Index showing that most banking consumers rate their checking account experience as either excellent or very good, a growing number of consumers — 22% — are using alternative banking products such as check-cashing services and payday loans.

Big mistake, the bank says.

While TD Bank has a vested interest in keeping customer cash inside its vaults instead of at a competing institution such as a check-cashing service, the bank makes a fair point: Check-cashing services and payday loan providers charge hefty fees for their services.

A$500 payday loan can carry a finance charge of $54.99, a 286% annual percentage rate in interest charges.

Fees vary at check-cashing services too, but consumers can expect to pay between 3% and 5% of the total amount of the check in service fees.

One in five consumers with a bank account are using alternative banking products, which could add needless cost to their monthly budget, said Ryan Bailey, executive vice president for retail deposit and payment products at TD Bank. Consumers who are using these types of services should have a conversation with a banker to learn about less expensive financial products that can meet their everyday financial needs.

And heres the dont know why part.

Of the banking consumers who do use alternative banking services, 16% say they really dont know why they use a payday lender, check-cashing service or even Western Union. That lack of knowledge can cost those financial consumers hundreds of dollars or more in fees they really dont need to pay and, in many cases, cannot afford.

Usually, its low-income financial consumers who feel the need to use alternative banking products such as payday loans and check-cashing services. But if they bypassed those high-fee services, theyd have more cash in their pocket at the end of the month by avoiding those budget-busting fees.

 

Oct 21 2014

Fact Check: Goddard right; Reagan backed payday loans

ANALYSIS: Payday loans provide borrowers with a short-term cash advance, generally less than $500. Borrowers write a check or give the lender access to their checking accounts with the agreement that the lender will cash the check after the borrower receives their next paycheck.

Interest on the loans is high, with rates averaging 400 percent, compared with credit-card interest rates of 12 to 30 percent, according to the federal Consumer Financial Protection Bureau.

Before 2000, Arizona prohibited loans with interest rates higher than 36 percent. That year, the state legalized what it called deferred presentment transactions — better known as payday loans — for 10 years. Despite efforts in 2008 and 2010 to extend the loans legality, they became illegal in July 2010.

The Reagan quote cited by Goddard comes from a December 2009 article in the Arizona Capitol Times, while she was a member of the Arizona House. With the sunset approaching, the newspaper queried Republican lawmakers on their plans to extend the loans or let them expire.

Theyre providing a service that people seem to enjoy, Reagan said. It doesnt seem like a rip-off to me.

She reiterated her support for the loans in a second article in January 2010, saying the interest rates make the loans seem like a worse deal than they are.

It costs more to bounce a check, she said. So, if you need a bag of groceries and the two options are go to write a bad check or go to one of these places, its actually a benefit and cheaper (to borrow from a payday lender).

Oct 20 2014

Kevin Yoder sure has taken a lot of money from Kansas City’s payday-loans crowd

Kevin Yoder sure has taken a lot of money from Kansas Citys payday-loans crowd

Posted

By David Hudnall

on Thu, Oct 2, 2014 at 10:34 AM

Oct 20 2014

Investing: Sell! Sell! Sell!

If you read the advice on the Internet, you know that you should sell all your stocks right now because a billionaire predicts an economic crisis so big that the Great Depression will seem like a debutante party. The currency will collapse, stocks will be worthless, and people will envy the Joads because at least they had a truck to throw themselves under.

If you listen to other, actual billionaires, such as Warren Buffett, youll hear that his favorite holding period is forever. Whos right?

As a rule, its better to follow bona fide billionaires with a track record, such as Buffett, as opposed to clickbait advertisements. Youll get your best returns from stocks over the long run, not by short-term trading. But even Buffett sells his holdings from time to time, and you should never hesitate to sell if its in your interest. When is that? Glad you asked.

Sell when your investment thesis just isnt working. You may have had great faith last year that RadioShack would be able to get out of its troubles. RadioShack was looking pretty darn cheap last year at $4.15 a share. Unfortunately, cheapness is relative, and RadioShack had no earnings last year, which explains the price. Had you bought on the assumption that things could only get better, well, you were mistaken. RadioShacks prospects still look dim, and its price has fallen to $1 a share. Your best bet: Take your loss and find a better place to put your money.

RadioShack is a relatively easy example. Lets say that you thought interest rates would rise, a reasonable investment conclusion, given how low rates are currently. And lets say you came to that conclusion at the end of 2010. So you decided to buy shares of Proshares Ultrashort Barclays 20+ Year Treasury ETF (TBT). The fund rises when bond prices fall and long-term bond yields rise.

Unfortunately, you were wrong: The fund fell 51% in 2011 and another 12% in 2012. It rose 24.8% in 2013, and its down 31.5% this year, according to Morningstar. Although the decline in long-term interest rates is breathtaking, that doesnt mean that they cant go further. Its always darkest before its pitch black, as former Fidelity manager Peter Lynch was fond of saying. Rather than assuming that the market is wrong, your best bet is to assume you are, take your losses and live to invest another day.

Sell when youre taking more risk than youre comfortable with. Lets say you were either very smart or very lucky and invested in Gilead Sciences in 2004. The biotech stock has averaged a gain of 27.39% every single year since then. A $10,000 investment would now be worth about $112,500, and you would have throw pillows made of crisp $20 bills. But Gilead is about as far as your luck has extended, and its now about half of your total portfolio.

You have a dilemma here. On the one hand, you have a stock that has rocketed and measurably improved your net worth. On the other hand, half your portfolio now rests upon the fortunes of one stock. Should you sell it all? No. But when a single issue takes up more than 20% of your portfolio, its time to think about taking a few chips off the table.

On a more commonplace level, suppose your goal was to reach $500,000 in your 401(k) plan. Youre 50 now, maxing out your contributions, and you have $400,000. Youre also 100% in stocks. You can probably reach your goal in 15 years without being 100% in stocks. And, as you get older, your ability to make up losses through increased contributions is falling every year. If you can get to your goal without being 100% in stocks, pare back a bit so you have less risk. Theres no reason to take more risk than you have to. You dont want Mr. Market to decide when you can retire.

Sell when you have a tax loss. If youre investing in stocks in a taxable account — and its generally a good idea to keep your stocks in a taxable account — you should always consider harvesting tax losses when you can. This is particularly true this year, because your long-term capital gains may be taxed at a higher rate than they were in 2013, making your capital losses all the more worthwhile.

You can use taxable losses to reduce any amount of long-term capital gains, which are gains on most stocks, mutual funds or exchange-traded funds held for a year or more. Lets say you have a $10,000 loss on RadioShack. You have $5,000 in long-term gains. You can use $5,000 of your losses to wipe out your $5,000 in gains. You can then deduct an additional $3,000 from your income at tax time and carry over the remaining $2,000 to the next tax year.

You cant re-purchase your loser for 30 days, or youll run afoul of the Internal Revenue Service, which will rule your loss a wash sale — meaning you cant take the loss. But in the grand scheme of things, 30 days isnt that long. You can wait until the wash sale period is over and repurchase RadioShack, if youre really a glutton for punishment.

Capital losses are taxed at 15% for most investments and investors, but if youre a single taxpayer with more than $406,751 in taxable income and a joint filer with more than $457,601 in taxable income, your capital gains rate is 20% — making losses all the more valuable.

Take your losses before Dec. 31, if you can — they will reduce your 2014 taxes. If you wait until January, you wont get the benefit until the 2015 tax year.

No one likes selling: It can be an admission of defeat, in the case of a losing investment. But sometimes, it just has to be done. Just make sure you dont sell because some guy on the Internet says everything is going to flinders. They havent been right yet.

Oct 19 2014

Freshest Payday Loans Review – Is It Really The Easiest Way To Get Money?

I suppose everyone knows how it feels to live from paycheck to paycheck. It can work most of the time, but what if some emergency happens? What if your car breaks down or what if you forgot to pay some bills a few months ago? One of the few options that you have is to look for payday loans, also known as short term loans.

These loans usually range from $100 to $1,000 and they are really simple to be approved. All you need is to be at least 18 years old, have a checking account and proof of your monthly income. Its really simple as that.

One thing that you should be aware of is, that you have to pay your loan within the specified time. Otherwise there may be additional fees if you fail to do so. Its pretty much an automatic process. You will provide your lender with your banking account number and the money will be deposited into your account and then withdrawn at the end of the month. This is why it is important for your paycheck to arrive before the loan ends, otherwise there may not be sufficient funds on your account.

Apply For Your Loan Today

Another important thing you should be aware of is to always check Terms and conditions and Privacy policy of your lender, in order to avoid any complications during the loan. But lets get into detail about Freshest Payday Loans.

Further Details

Freshest Payday Loans do not provide credit checks. As I previously mentioned, the requirements for a loan are pretty low. You have to be employed and make at least $800 per month, plus you need a bank account, which you surely have. All loans are paid by direct deposit, which makes the process much faster.

Freshest Payday Loans arent a lender. They are merely a middle man with a huge database of lenders and they are actively looking for ones which are best for your particular needs. So if you are looking for the best interest rates, then that party is already covered by the company

It also doesnt matter if you have a pretty bad credit or none at all, you will still be approved without any issues. Based on your home pay you can receive up to $1,000. And the best thing is, that you will receive the money the very next day, which makes it indeed an emergency solution.

You should however be aware, that short term loans can get quite expensive, because they have pretty high interest rates and should be used only in emergency situations. So definitely read all the details before you apply.

Visit The Official Website For More Information

You should also be aware of the consequences, in case you dont pay the loan according to the terms. In that case the following things may happen:

- In case you are late with your loan, you may be charged late fees.

- Your account may be sent to a collection agency

- Your credit score may be negatively affected, because you may be reported to a consumer reporting agency.

- Your loan may be refinanced or renewed, which will also include some additional fees and interest.

As mentioned before, FPL are not providing online payday loans. Only a lender can inform you about exact details of your loan. They only connect you to make the process far more faster. However it has to be mentioned, that only people from United States are eligible for this online loans program.

And if you are asking what for can you use your loaned money, well, there are no limitations whatsoever, feel free to spend the money on whatever you want, whether its an emergency, vacation or just fun.

Conclusion

All in all, Freshest Payday Loans are the best solution if you are looking for a fast emergency service which can provide you with up to $1000. You will receive the money the very next day and you can spend the money on whatever you want, there are no limitations. Company is also trying to provide you with the best possible interest rates, so you wont overpay your loan as much as you would with other companies. So to sum it up, this service is a complete no brainer.

So if you want to know more or if you are ready to apply for your online loan, here is the link to the official website, so definitely give it a try, you wont be disappointed.

Visit The Official Website – Freshestpaydayloans.com

Media Contact
Company Name: FPDL
Contact Person: Jonathan Smolski
Email: Send Email
Phone: 2152238840
Country: United States
Website: http://justbestdeals.info/Freshest-Payday-Loans-Official

Source: www.abnewswire.com

Oct 19 2014

Toxic finance: Reckless payday lender Wonga wipes mountain of debt

Thousands of customers who took loans with controversial pay day lender Wonga are to have their debts written off, in an action expected to cost the ‘legal loan shark’ more than 200 million pounds.

The company will wipe
the debts of 330,000 customers who are trapped in arrears of 30
days or more, while a further 45,000 customers will get to repay
their loans exempt from interest.

The move is a “consequence” of Wonga’s discussions with the
Financial Conduct Authority (FCA), who said the firm “was not
taking adequate steps to assess customers’ ability to meet
repayments in a sustainable manner.”

The FCA also said that Wonga did not do enough to vet customers
and their ability to pay back the interest incurred on loans,
which can be higher than 5,000 percent.

As a result, a large number of Wonga customers were forced to
admit they were unable to pay the company back after taking out a
short-term loan.

“We are determined to drive up standards in the consumer
credit market and it is disappointing that some firms still have
a way to go to meet our expectations,” said the FCA’s
Director of Supervision Clive Anderson.

“They [lending companies] need to lend affordably and
responsibly,” he added.

Last month, the payday lender recorded a profit loss of 53
percent – one of the largest slumps in its operating history.

The lender revealed its pre-tax profit in 2013 was 39.7 million
pounds, down from 84.5 million the previous year.

Wonga said the fall was due to “remediation costs” – money that
it had to pay back to its customers – including 2.6 million
pounds it had to pay out to more than 45,000 customers after it
delivered debt collection letters from non-existent law firms.

However, Wonga did record a 15 percent rise in the number of
loans issued between 2012 and 2013, worth 4.6 million pounds.

Wonga’s Chairman Andy Haste told British media there was a “real
and urgent” need for change.

He also told the BBC it expected to be “smaller” and “less
profitable” following increased FCA regulations, which include
more stringent background credit checks.

“Our regulator is determined to improve standards in consumer
credit and I share that determination,” he said.

“There is much to do in order to make Wonga a sustainable and
accepted business, and today’s announcement is a significant step
forward in that process.

Labour MP John Mann
called for Wonga to be brought before Parliament’s Treasury
Select Committee to “explain how they lent so much money to
people it knew could never afford to repay it.”

“Sadly, it comes as no surprise to learn that Wonga knowingly
lent money to people who will never be able to afford to repay a
loan and it is morally right that they have been forced to write
off these loans,” he added.

This is not the first time Wonga has come under heavy criticism
for its practices.

Since July, the firm has not been allowed to produce
advertisements designed to attract young people, such as its
campaign that used puppets, screened during children’s television
programming – an attempt to soften the brand, critics allege.

In 2012, Wonga was also forced to apologize to Labour MP Stella
Creasy after she received personal abuse via Twitter, calling her
“nuts,” “pathetic” and “a raving self-publicist.”

The MP has long been outspoken on payday loan companies, and has
lobbied the government to set a cap on the amount customers can
be charged for small, short term loans.

While the MP welcomed the fall in Wonga’s profits, she said the
rise in the number of loans being issued should be a cause of
concern.

“The fact that they are reporting a 15 percent increase in
customers for this toxic form of finance reflects that there are
still millions of people for whom there is too much month at the
end of their money,” she told the Financial Times.

Under new rules issued by the FCA, payday lenders will not be
able to reclaim debts directly from customers’ bank accounts,
while a cap of 0.8 percent interest per day has been proposed for
short term loans.

According to the UK’s Public Accounts Committee, around 2 million
people in the UK used payday loans, while the Office of Fair
Trading believes around 1.8 billion pounds is loaned in high cost
plans each year.

Oct 19 2014

Government Debt Isn’t the Problem—Private Debt Is

Former Fed Chairman Alan Greenspan, discussing the financial crisis of 2008, wrote that “financial bubbles occur from time to time, and usually with little or no forewarning.”

That’s misleading at best. The 2008 collapse was predictable. And, more generally, major financial crises of this type can be seen well in advance–and prevented–if you know what to look for. In fact, there’s a fairly simple formula that predicts such crises with a high amount of confidence. And it suggests that the world economy remains in more peril than is generally appreciated.

This conclusion comes from an examination of financial crises around the world, dating back to the 19th century, that I conducted with my colleagues and summarize in my new book The Next Economic Disaster. The logic behind our conclusion can be seen in the diagrams below.  

Take a look at this graph:

Crisis of 2007-2008: US GDP, Public Debt, and Private Debt (in Billions)

GDP data comes from the Bureau of Economic Analysis, private-debt data from the Federal Reserve, and Federal-debt data from the Treasury. (Richard Vague)

Note that, in the years prior to the crisis, the line representing federal government debt roughly parallels the line representing GDP; federal debt wasn’t growing dramatically as a fraction of GDP. So the big post-crisis standoff between Democrats and Republicans over the federal debt wasn’t focused on the big problem.

What was the big problem? Look at the line representing private debt. It clearly is not parallel to the GDP line and, indeed, reflects a rapid growth of private debt relative to GDP.

What’s alarming is that, of the two ingredients for an economic crisis–high private debt and rapid private-debt growth–one is still with us even after the 2008 collapse.

By itself this isn’t shocking. We all know that a growth in home mortgages preceded the crash, and home mortgages are one kind of private debt–along with other consumer borrowing and borrowing by businesses. What’s more surprising is what we found when we looked at lots of other financial crises around the world, dating back to the 19th century: Though most of these crises aren’t thought of as being fundamentally caused by excessive private debt, the fact is that they were preceded by the same kind of runup in private debt that the US saw prior to 2008. 

Just to take one example, look at this data from Japan prior to its financial crisis of 1991. 

Japan Crisis of 1991: GDP, Public Debt, and Private Debt (in Millions of Yen)

GDP data comes from the UN, private-debt data from the Bank for International Settlements, public-debt data from Carmen M. Reinhart and Kenneth S. Rogoff. (Richard Vague)

Look familiar? Time and again, that’s the story we found: A major financial crisis is preceded by a runup in private debt relative to GDP. In fact, there seems to be only one other ingredient required for a crisis: that the absolute level of private debt is high to begin with. We found that almost all instances of rapid debt growth coupled with high overall levels of private debt have led to crises.

To put a finer point on it: For major economies, if the ratio of private debt to GDP is at least 150 percent, and if that ratio grows by at least 18 percent over the course of five years, then a big crisis is likely in the offing. 

Until the moment of reckoning, things may seem wonderful. Rapid private-debt growth fueled what were viewed as triumphs in their day–the Roaring Twenties, the Japanese “economic miracle” of the ’80s, and the Asian boom of the ’90s–but these were debt-powered binges that brought these economies to the brink of economic ruin.

What’s alarming is that, of the two ingredients for an economic crisis–high private debt and rapid private-debt growth–one is still with us even after the 2008 collapse. Private debt in the US, relative to GDP, stands at 156 percent. That’s lower than the 173 percent it reached in 2008, but it’s still nearly triple the level–55 percent–it was at in 1950. Indeed, across the globe there has been a steep climb in the ratio of private debt to GDP over that period.

The situation in China is particularly alarming. Look at this graph, which shows  changes in the ratio of private debt to GDP and the ratio of public debt to GDP:

Ratio of Chinese Private and Public Debt to GDP

GDP data comes from the UN, public-debt data from the IMF, private-debt data for 1997 to 2007 from the Bank for International Settlements and from CEIC Data for 2008 to 2013. (Richard Vague)

Applying our private-debt early-warning criteria to China, we can see that its economy is at risk of a major financial crisis in the near future–a significant concern because of its size and importance to the world economy. Chinas five-year growth in private credit to GDP is near 60 percent. Its private debt to GDP ratio stands is approaching 200 percent. (As always, data on Chinas economy must be considered provisional: The numbers for China include “shadow lending” but are somewhat difficult to pin down, and I have seen differing numbers for the current level of private debt in China that range from 167 percent to 200+ percent. But in all cases, the recent five-year private debt to GDP growth trends are above 40 percent.) To be sure, China, by virtue of the government’s large role in the economy, its fiscal assets, and other distinctive features, could forestall the day of reckoning a few years yet. Still the broader picture–extremely high private-debt levels–is alarming. 

Oct 18 2014

Real estate recovery continues

EAGLE COUNTY — Pre-sold real estate is returning to the Vail Valley, albeit in a small way.

As the local real estate market continues its recovery from its 2009 collapse, 2014 is looking like the best year since the boom times in terms of both transactions and the money generated by those sales.

The most recent data from Land Title Guarantee Co., which uses county records of closed transactions, shows a continued return to health in the local real estate market. Bank sales, which peaked at more than 20 percent of all real estate transactions a few years ago, now account for about 5.1 percent of all sales through July 31. Sales volume, the amount of money generated by those transactions, is more than 30 percent more than 2013’s totals through the end of July.

The number of sales through the first seven months of the year is off slightly from the 2013 pace, due largely to a bit of a drop in transactions in July.

Unexpected Dip

Slifer Smith Frampton Real Estate Vice President Julie Bergsten said the July dip was unexpected. There’s usually a bit of bounce in sales in July she said, and that bounce didn’t materialize this year.

On the other hand, Bergsten said sales in August — transactions either under contract or which haven’t yet shown up on county records — rebounded a bit from July, and are at the same levels seen in the same period in 2013.

Those sales were aided a bit by pre-sales at Brookside Lofts in Avon. Work hasn’t yet started to convert former office space to residential space in the building along US Highway 6, but Bergsten said eight of the 16 units are already under contract.

Those units, which start at about $600,000, are an example of movement in the market for units priced less than $1 million. And activity in the market depends in large part on the neighborhood.

Lack of Inventory

While Vail’s market remains strong, nearly half of all July’s sales were in non-resort areas of the county. And, Bergsten said, the market remains sluggish for single-family homes in Beaver Creek.

Conversely, a less-expensive unit such as a condo will probably move quickly, in part because there aren’t many of those units available.

The lack of inventory is also being felt in Gypsum. There, units priced at $400,000 or less tend to go quickly — depending on the neighborhood and the unit, of course — primarily because there are so few homes available.

Laurie Slaughter, of Berkshire Hathaway HomeServices Colorado Properties’ Gypsum office, has long sold real estate in that part of the valley. She said the lack of inventory in the lower-priced part of the market is due in part to the fact that the flood of foreclosures and short sales seen a couple of years ago has slowed to a trickle. That leaves fewer units available, although Slaughter said some sellers are trying to venture back into the market.

Some of those sellers are testing the market, setting prices that might be a bit higher than buyers are willing to pay.

Trading Space for Convenience

While the lower end of the market sees the few available units sell quickly — for the most part — Slaughter said the Cotton Ranch neighborhood around the Gypsum Creek Golf Course is selling more slowly. Given the options at about the same price closer to the resorts, Slaughter said it’s possible some buyers are trading space for convenience.

Both Bergsten and Slaughter said given the lack of units in more-active parts of the valley, it could be time for developers to start building more homes.

Slaughter said the Stratton Flats property along US Highway 6 is a “missed opportunity” for builders right now.

“It would have been nice to have homes there for sale,” she said.

While the local market has some dips and rises at the moment, Bergsten said that’s a good sign of a healthy, normal real estate market.

“This is the kind of market we saw before 2005,” Bergsten said. “Normal markets go up and down from time to time.”

Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, smiller@vaildaily.com or @scottnmiller.

Oct 17 2014

Synchrony Financial Scores ‘High Buys’ From Key Analysts

On September 9, the quiet period for the lead underwriters of Synchrony Financial (NYSE:SYF) ended. As contemplated in the article, Synchrony Financial: Underwriter Buys Coming Next Week, SYF had an avalanche of analyst reports released Tuesday. All eight Joint Book-Running Managers, issued Buy ratings, with most price targets ranging from $27-$31/share.

Selected comments from the research reports include:

JPMorgan, We view Synchrony Financial as a differentiated and compelling consumer finance company. We view the private credit card business as a more profitable business than general credit cards..

Credit Suisse, Retail cards offer protection from Higher Credit Losses and Funding Costs.

Goldman Sachs, We view SYF as uniquely positioned to capitalize on its market leadership in private label through deeply integrated partner relationships and the leveraging of data and analytics.

The highest price target, $31/share, came from from boutique firm, Keefe, Bruyette amp; Woods. The firm noted, . . . presents investors with a unique opportunity to gain exposure to a niche vertical within the credit card industry, while also carrying multiple avenues for upside.

Nomura, with a $23/share target, was the only firm to suggest a negative future for SYF, indicating the Company was losing partners as costs are increasing and margins compressing.

General Electric (NYSE:GE), SYFs former parent and the selling shareholder in the IPO, has maintained it will continue to hold its 80%+ position in SYF until late 2015. If SYF reaches the mode price target of $30/share, GE will pocket an extra $4 billion in book profits over the IPO price.

GE shareholders will be provided with an opportunity for a tax-free share swap in 2015. If there is insufficient shareholder interest, GE will sell its remaining shares in an orderly manner to optimize proceeds. GE has not indicated what it will do with proceeds from the IPO, or from future sales.

SYF, whose IPO price was $23.00, has traded as high as $26.02. SYF closed at $25.20 on September 9, the day most analyst reports were released.

(click to enlarge)

Source: Yahoo!

I continue to be positive about SYF, though with somewhat less enthusiasm than when the stock traded at $23.00. I take comfort in a beginning valuation multiple of 12x consensus 2015 earnings, price targets with upside and a comment by Credit Suisse which bodes well for the future, once the spin-off and capital distribution plan is approved, this would warrant a higher multiple.

This article only reflects the authors opinion. It is not designed, and should not be used as the basis of an investors buy or sell decision. Investors should always conduct their own due diligence and make their own buy and sell decisions.

Oct 17 2014

Rev. David Snardon | Regulating payday loans

Many thanks to The Courier-Journal for its ongoing reporting on payday loans. A recent article recapped federal and state efforts to enforce existing laws. (Payday Lenders Feel Laws Effects by Jere Downs, 8/25/14). We applaud enforcement efforts. We need them. But the C-J followed up with an editorial that was right on point. Existing laws arent strong enough. (More Restrictions on Payday Lending, 9/1/4)

We are part of a growing group of faith leaders who agree. We are speaking up now because the problem is getting worse. Payday loans are costing families more each year, and keeping them in debt longer.

How do we know? As described in the C-J news article, four years ago Kentucky created a database of payday loan transactions. Lenders must check the database before making a new loan.

The database helps enforce a limit of two loans up to $500 per borrower.But the database also tells a larger story. Numbers we got from the database through Open Records requests show that:

o Payday loan borrowers are trapped in debt longer each year, up from an average 160 days in 2010 to over 206 days in 2013. Thats more than half of the year!

o Borrowers pay more in fees each year, up from $105 million in 2010 to $121 million in 2013.

o The average borrower in 2013 paid $573 in fees for payday loans — up from $529 in 2010.

The C-J news story described a moratorium on new licenses for payday loan stores. But while the number of stores has gone down slightly, total loans are growing. In 2010, there were 1,563,694 transactions. By 2013, the number was over2,192,018.

Were now over 2 million payday loans per year.

How do companies keep customers coming back for more loans? They require a repayment in 14 days. Many borrowers cant pay in such a short time. So, they take out another loan to pay off the first, and pay fees for each new loan. Its a debt trap that can be difficult to escape. Sadly, many observers say its also the industrys deliberate business model.

For too many Kentuckians payday loans are not a financial fix. They are financial quicksand. They can lead to a cascade of financial consequences — including bankruptcy. Meanwhile, churches and social services ministries work daily to serve the needs of many of these same individuals. Payday loans dont help.

The new federal Consumer Financial Protection Bureau can take action against a payday lender who violates federal law. It did not long ago with Ace Cash Express. But it has no authority to regulate payday loan interest rates. That power is reserved to the states. Many states have taken action by capping interest rates on payday loans. The most common interest rate limit is 36 percent, the same as Congress set on payday loans to military families.

Kentucky should take action, too. As the C-J editorial pointed out, the work of our lawmakers that began with the database is incomplete. Its time to act on what the data show.

Many religious denominations in Kentucky have already spoken out against payday lending. Resolutions bearing witness to the harm payday lending causes and supporting a 36 percent interest rate cap have been passed by the Kentucky Council of Churches, the Kentucky Baptist Convention, the Kentucky Conference of the United Methodist Church, the Consolidated Baptist District Association, the Kentucky-Indiana Lutheran Convention (EILU) and the Jewish Community Federation.

As people of faith, we feel a moral obligation to oppose the predatory nature of Kentuckys payday loan industry. If this issue concerns you, we urge you to contact your legislators and ask them to end the payday loan debt trap in the Commonwealth.

Rev. David Snardon is pastor at Joshua Tabernacle Missionary Baptist Church and the co-president of CLOUT (Citizens of Louisville Organized and United Together). CLOUT is a member of the Kentucky Coalition for Responsible Lending.