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After 18 months, One PacificCoast pulled the plug on a money-losing lending program it hoped would compete with payday lenders.
May 9 -
Consumer Financial Protection Bureau Director Richard Cordray sat silently at a public hearing as a room full of the industry's customers and employees argued that Americans should be allowed to make their own borrowing choices.
May 16 -
The regulator of federal credit unions is promising to take steps to curtail high-cost, short-term loans, in the wake of tough action by banking regulators.
May 17
Re "
Once again, the critics attack short-term lending but fail to offer any sustainable alternative to meet consumer demand.
In deciding to discontinue its One Pac Pal loan, One PacificCoast Bank discovered what regulated lenders already understand a 36% annual percentage rate cap on short-term credit is not economically sustainable.
This is reaffirmed by academic
Consumers benefit from a wide variety of credit options, and short-term lenders already compete with a range of options offered by banks and credit unions: deposit advances, overdraft protection and nonsufficient funds fees are all forms of short-term credit. Compared to these, a cash advance is often the least expensive, most transparent and reliable choice for managing short-term financial challenges.
We welcome increased competition and innovation. Such efforts will only be to consumers' benefit. But criticism of regulated short-term lenders' business practices by competitors that have failed to develop workable alternatives that appeal to consumers is nothing more than sour grapes.
Jamie Fulmer is a senior vice president at Advance America in Spartanburg, S.C.