Payday America

They attract customers festive cruel and promises "100% agree" and "Open start and end." Pay approximately 40 loans, most of which did not exist 20 years ago, are hidden in Madison's low-income NEIGHBORHOODS and continue along the strip of the University of Wisconsin-Madison campus common isolated. They offer quick money without credit check, and people, bait. Pay credit loans from 1.68 million in Wisconsin in 2008, the right to loan $ 723.2 million at an interest rate usually more than 500 per cent. Borrowers indicate that they have no other choice. Bad decisions, bad luck and bad credit, it pays them ready to record, be comfortable in loans in minutes. The money, an "advance" on the creditworthiness of the content of the next at a high price, say critics of the industry. The brief "Pay" called the term of the loan, the loan and a portion of the borrower "precarious financial situation of time repayment impossible for many. Forced, on the role of loan, the borrower, that only expenses Scramble each pay. Some are forced to additional funding for life as they struggle to pay loans and the original debt.

"I was desperate," says "Valeria, the requested that his real name not used. A mother of Madison, Valeria was a point to pay $ 500 a month to pay three loans amounting to 2000 $. They adopted the loans to households to combat costs, while benefits for small businesses. " I can not, "she says." I am becoming more and more important - it is "." It is in the bottom of the right to loan sharking, our position, "says Kathleen days, a spokesman for the Center for Responsible Lending, a Durham, NC-based independent research group, has the eyes more than once on loan payday industry. industry representatives say they are willing to pay a service of the lenders . man, loans pay day, not as a threat, their costly bounced check and other banking sanctions, "said Jamie Fulmer, director of public affairs for the South Carolina-based Advance America, the largest lender pay. "The people of our products are good, honest, workers rights, which bind to financial aid. You are financial act. "

The consequences of this often few people with easy access to conventional loans, said Sarah Hawks, coordinator of campaigns for responsible lending Wisconsinites, a focus on the coalition, that the cap loans payday in Wisconsin with 36%. "People are shocked when I spoke on the rates and terms of loans," said Hawks. The coalition is working on the man, "as the Hawks is a political struggle, pits consumers against the partisans and - finance, high degree of organization of payroll loans to domestic industry. The Coalition hopes that the question posed in an attempt to state legislator seems impressed in the past by industry, deep pockets and the use of rhetoric. Organizations, to testify to the legislature on how the loans payday harm the families, and "victims" of the branch are their stories.

Debra Neubauer, Director of Financial Education Center in the Villager Mall in South Madison, said she was in an uptick of the victims of this form of loans from the competition, the economy soured, with people who suddenly out of work and no need for. And not only the poor, she adds, part of the cycle. "It happens with a series of income," said Neubauer. "Some people have more income out of their form or their agent, including - it's human nature." Although customers loans pay different incomes, most earn less than the median income. They are disproportionately Latino and African-Americans, industry and scientific studies. They are often women in jaren'30 with schools and children less than 18 years.

People living in poverty are particularly vulnerable to predatory practices of loans, said Howard Mandeville, executive director of Movin 'Out, Inc., an agency that helps low-income families, disabled, members of the security enclosure. Are also at risk persons with disabilities, the cognitive or mental ability to practice good decision, and that may not completely understand the conditions of a loan payment or the reality of the difficulty, the payment again.

Mandeville said his office, such as payroll loans may prevent its customers have a home of their own country. Clients to programs that help low-income, first buyer, but some credit is achieving what they had to do by the completion of their opposition to the stability of possession of the house. "We are interested in law and order, low-income households, the head of water, and it is a benefit to the public, with a limit on interest rates", a Mandeville.

Payroll loans elastic started in Wisconsin by the legislature in 1995 that if 18% of consumers, the interests of Cape loans. The move was allegedly owned banks to improve competitiveness in the rapidly expanding industry of credit card, but he helped spawn the growth of loans to pay day to the State. In 1996, there were 64 sites loan payday in the stands, in the year 2008, the number of 542, an increase reflects the rapid growth of the sector at national level. The amount of credits by industry in the state, ballooned from $ 11.2 million in 1996 to $ 723.2 million during the last year, has increased by almost 64.5 times, according to statistics from the Department of State financial institutions, licenses and regulates the industry.

"The reduction of lending rates is a big business in Wisconsin," said Hawks Consumer Advocate, which the legal profession and public policy, director of La Casa de Esperanza in Waukesha. Czech State Gordon Hintz, D-Oshkosh, chairman of the Committee on Consumer Protection, an invoice, the CAP to 36% interest on consumer credit of $ 5,000 or less, including loans for car titles and other instruments in the development of the industry more consumer credit.

Hintz unveils legislation in June with the State House Press, but not officially yet, because the measure contributes to a long list of co-sponsors and tactics to ensure that the accounts are to the commission, instead a less favorable. The 36% Zinsplafonierung was in 2006 a federal law on loans of military personnel, and a proposal that is now before Congress, it would be for all consumer loans.