Talk:Payday loan

Why No Actual Lender Links?

Other wikipedia articles in the financial sectors link to the top banks in each sector. Why is payday loan different? Are link spam concerns affecting the quality of the article?

Feel free to add them if you like but please make sure they are legit. The Payday loan page gets many spam links added to it. If the link looks the least bit suspect, it gets removed. Monkeyman 1 July 2005 01:02 (UTC)

"US-centric", redux

Please stop adding the globalize tag to this article, or any of its sections, without showing cause on this talk page as to why the article is "US-centric". Yes, this article focuses on the US, but for good reason: This is an American topic, either primarily or exclusively. To suggest that this article could be "globalized" without offering any sources to substantiate this practice outside the US is to engage in original research. -- JeffBillman (talk) 04:09, 9 June 2008 (UTC)

Pay-day loans exist in the UK, I see them advertised all the time. (REMOVED LINKS) The Downing Street petition acknowledges that pay-day loans have an American heritage (which, I admit, is something I was unaware of before tagging the article), but given that pretty much every UK high street (at least in poorer areas) seems to have shops advertising pay-day loans, I don't see why this article should focus exclusively on the US phenomenon. It certainly seems that not only do pay-day loans exist in the UK, but reliable sources verify this fact. Rhebus (talk) 12:45, 9 June 2008 (UTC)

Okay, then add info to the article. Tagging the article as needing a worldwide view puts us in one of two unfortunate positions: Either we are led on a wild goose chase looking for examples outside the US which to our knowledge may or may not exist, or we are forced to assert a negation. It's a lot easier simply to provide info of practice outside the US if one is aware of it, which apparently you are. The globalize tag is only helpful when examples of usage outside a given country should be patently obvious. -- JeffBillman (talk) 14:13, 9 June 2008 (UTC)

I changed the lede in the section you tagged from "Payday lending is a controversial practice and faces both legal battles and public perception challenges in nearly every state," to "Payday lending is a controversial practice and faces both legal battles and public perception challenges in nearly every place where it is practiced." This I believe addresses the immediate concern that the section is "US-centric"; however, we will need to provide examples outside the US. -- JeffBillman (talk) 14:25, 9 June 2008 (UTC)

Added a source of a UK parliament early day motion criticizing payday lending. I think that's WP:V, WP:N and WP:RS :) Having said that, the whole article is US-centric. The second paragraph begins "Though payday lending is primarily regulated at the state level.." clearly assuming US without explaining that this is a US-based phenomenon. I ought to be doing work, so I'll reword as and when I have time, but I don't feel that the article is satisfactory yet. Rhebus (talk) 14:53, 9 June 2008 (UTC)

I'll put the tag back on the article as a whole. With the sources you provided, examples of usage are now-- as I wrote earlier-- "patently obvious". That is, with Parliament criticizing the practice, it's patently obvious that this occurs outside the US. So it's now fair to say the article does not represent a worldwide view. -- JeffBillman (talk) 19:41, 9 June 2008 (UTC)

Thanks, that's very gracious of you. I'll try to find more UK sources and put them in the article; however, it seems much easier to find payday loan companies than it is to find sources talking about payday loan companies. :( Rhebus (talk) 08:30, 10 June 2008 (UTC)

...in particular, I can't find any "general" sources about payday lending in the UK which could go in the article introduction; no overviews, no details about regulation (I suspect they don't have payday-specific regulation and I don't think there are usury limits), no real statistics about how widespread the practice is except for the mention in the parliament early day motion that MoneyShop (or Dollar Financial) has over 200 branches. Rhebus (talk) 09:02, 10 June 2008 (UTC)

(This is not exactly a reply but I think comes under the head of this section, nece not indenting.)

I feel that the statement that the loan is "usually" for two weeks is unnecessarly US- (or North America-) centric. It is because most people in the US are paid every two weeks, I believe. In the UK most people are paid monthly, so it is far more common for the term to be 1 month (usually with no reduction for early redemption). I can of course try to find sources for my assertions here, but I would like others' opinions before doing so. SimonTrew (talk) 10:52, 24 July 2009 (UTC)

APR calculation

I'm concerned about inconsistent calculation of APR in this article. $15 charge per $100 for a two-week loan can either be calculated as 15% * 26 = 390% APR, or as $(1.15^{26}-1)\times100 = 3685\%$. The former is the charge for holding $100 in debt constantly and paying each charge on a fortnightly basis; the latter is the charge for letting the charges compound interest. Based on REMOVED LINK, it seems that UK advertising regulations require the second, because they charge £25 per £100 for a 30-day loan, which results in a $(1.25^{12}-1)\times100 = 1355\%$ APR, whereas the simple interest calculation is 25 * 12 = 300%. Since the different methods lead to such vastly different reported APRs, we should be consistent one way or the other in the article, and perhaps have a small (one paragraph max) discussion about this issue. Which should we use? I support the compound interest calculation, because it reflects what would happen if you "rolled over" the loans for a year. Rhebus (talk) 11:26, 13 June 2008 (UTC)

Apr has to be displayed even on payday loan sites in the UK anyway, even if it looks unfavourable. ie REMOVED LINK 81.136.144.79 (talk) 10:34, 6 June 2009 (UTC)

For those who might not want to click such a link, the bottom of the page quietly states "Typical apr 1737%" --CliffC (talk) 15:18, 6 June 2009 (UTC)

But the interest is NOT compounded: since the £25 is paid off each month, the total is £25 %times 12. I understand the calculations etc, but don't see your apparently contradictory statement that the interest is compounded, when generally it is not. SimonTrew (talk) 10:56, 24 July 2009 (UTC)

ORIGIN OF PAYDAY LOAN BUSINESS...

the payday loan business, as large as it is today, began in the very early 1980's by a person in Portland, Oregon. it began as a service offered from one worker to other co-workers in a factory in Portland, Oregon. many people working at the factory had complained about "not enough money to make it to pay day" and so this person decided to help his co-workers out until payday. it began as a small service to co-workers, based out of the home, and quickly made its way to being a service out of a small office.

"Payroll Advance Service, Inc." established, in Portland, Oregon. this service was not available anywhere else, at that time, and to the best of our knowledge. This service had no known competition throughout the 1980's, and almost no competition throughout the early 1990's. The only known competition, in the Northwest, arrived on the scene in the mid 1990's.

The service was short lived, and then overhauled to coinside with State Laws, and re-established as "Payroll Advance Systems." The service, when originally established, was meant as a tool for those who could not borrow money from the bank, those who had no other financial alternative, and those who were realistically able to cover the written check at the time of deposit. When the service was originally established, it was operated by a local family, who treated their customers with respect, who knew their customers very well, who recognized thier customer's ability to make good on any such transactions, and also recognized those customers who fell into a financial trap, and allowed those customers an easier way out of that financial trap, had they been caught into it. In most all cases, Payroll Advance Systems only serviced those customers who were expected to successfully use this financial tool as it was meant to be used. In many cases, Payroll Advance Systems offered reduced fees at every opportunity, offered no service charge to military veterans, offered reduced charges and slashed balances to those who simply could not afford to pay back the full amount.

Originally, this service was meant as a useful financial tool for the working class family. The service, when originally established, took into account each individual person, and treated them with kindness and respect. A much larger company came along and helped turn this service into a very larg, stricktly profit driven, money making machine which appears to feed off the financially unfortunate, and disreguards the individual and their own personal circumstances. —Preceding unsigned comment added by 71.20.159.179 (talk) 21:20, 4 May 2010 (UTC)

Useful pro-payday lending source

This article is by Jonathan Zinman, published by the Philadelphia Fed, on an industry-funded study done by Zinman.

http://www.philadelphiafed.org/research-and-data/publications/working-papers/2008/wp08-32.pdf

Here's the colophon:

Thanks to Consumer Credit Research Foundation (CCRF) for providing household survey data. CCRF is a non-profit organization, funded by payday lenders, with the mission of funding objective research. CCRF did not exercise any editorial control over this paper. The views expressed here are those of the author and do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System. --Pnm (talk) 01:07, 10 June 2010 (UTC)

External links section

The external links section has gotten out of hand. Any suggestions as to how to pare it down? Can we convert some of these to inline citations? --Nuujinn (talk) 15:29, 17 June 2010 (UTC)

Since no one's responded, I'll be taking a big knife to this section shortly. --Nuujinn (talk) 16:56, 7 September 2010 (UTC)

Zoo of external links

Please rehabilitate these as inline citations before reintroducing them to the wild. --Nuujinn (talk) 00:02, 8 September 2010 (UTC)

Articles

• Lisa Bachelor, "You can settle the loan on payday - but the APR could be more than 2,000 per cent", The Observer, June 29, 2008
• Jennifer Brown, "Payday-loan legislation faces a fight", Denver Post, February 19, 2008
• "Payday lenders: Beating back rate caps in Richmond", January 31, 2008
• Brennan Clarke, "Loan rangers", BCBusiness, January 1, 2008
• "Payday lenders craft user protections", USAToday, February 22, 2007
• "This Opinion Brought To You By..." Criticism of Tom Lehman's article on Payday Lending and Public Policy, Business Week, January 30, 2006
• "America's growing fringe economy: Financial services for the poor and credit-challenged are big business", Dollars & Sense magazine, November/December 2006
• "How the other half banks: The depressing, amazing 'payday loan' business", Slate.com, May 10, 2004
• In debt we trust Documentary about banking practices, including payday loans
• Barry Yeoman, "Sudden Debt", AARP magazine
• The Toledo Blade: Local payday lenders cash in on rising short-term needs
• Broke, USA: From Pawnshops to Poverty, How the Working Poor Became Big Business - video report by Democracy Now!

Government resources

• FDIC Guidelines on Payday Lending
• "The Cost of Payday Loans", the Financial Consumer Agency of Canada
• Supreme Court of the United States. Marquette National Bank of Minneapolis v. First of Omaha Service Corp. et al., 439 U.S. 299 (1978), Findlaw.com

Industry reports

• "Predatory lending and the military: The law and geography of "payday" loans in military towns", March 2005
• "Defining and Detecting Payday Lending", Federal Reserve Bank of New York
• "Payday Lending: Do Outrageous Prices Necessarily Mean Outrageous Profits?", Fordham Journal of Corporate & Financial Law
• Veritec Solutions white paper, August 2007
• "Payday lending companies fill consumer demand", Truman State University
• "Payday Lenders: Heroes or Villains?", Adair Morse
• "Payday Holiday: How Households Fare after Payday Credit Bans", Donald P. Morgan and Michael R. Strain
• "An Experimental Analysis of the Demand for Payday Loans", Bart J. Wilson, David W. Findlay, James W. Meehan Jr., Charissa P. Wellford, and Karl Schurter.
• "Payday lending: Serving the unbanked", Mises.org, February 10, 2004
• "Banks Shift from Overdraft Fees to Payday Loan Type Products", February 25, 2010

Organizations

• Community Financial Services Association of America, US payday loan industry trade organization
• Consumers Union Fact Sheet, Consumers Union
• Payday loan site of the Consumer Federation of America, a consumer advocacy organization
• Utah Consumer Lending Association, Local trade organization representing cash advance lenders
• Virginians Against Payday Loans An alliance of businesses, consumer advocates, and faith-based groups