Newell continued, as many do, to just pay the $30 fee every two weeks for six months and not the $200 she had to eventually borrow from her family, piling up an additional $360 in debt.
The $42 billion-a-year industry outnumbers Starbucks and Burger King in outlets across the country. According to one study, the explosion happened a little more than 10 years ago when the number of payday loan offices increased nationwide from less than 500 in the early 90’s to approximately 12,000 in 2002.
The “pay-day loan bill” that upped the limit in Tennessee this year was sponsored by Sen. Bill Ketron (R-Murfreesboro). The bill also requires a presence in Tennessee for online services and fixes the rate at $15 per $100 loaned.
“It took off in the 90s, and it has exploded not only in Nashville but across the country,” says Kathleen Calligan of the Better Business Bureau of Middle Tennessee. “Unfortunately, so many states have pretty much wrapped their arms around this industry and have given them special privileges and considerations. They don’t have to abide by the rules that other financial institutions have to.”
Loan shops such as Check into Cash or Tennessee Quick Cash are aimed at those who have no or poor credit, the young, the poor and those who live on or near military bases. The industry thrives during bad economic conditions and because banks rarely offer small loans, for years a service consumers relied on for money to tide them over in hard times, Calligan says.
Cleveland, Tenn.-based Check into Cash, for example, is the third largest payday lender in the country. Founded in 1993, it operates more than 1,100 branch locations in 30 states and was founded by W. Allan Jones.
“The traditional banking relationships were pretty much built on the little, short-term, 90-day personal loan,” Calligan says. “They helped a lot of people even as late as the 70s and probably even in the early 80s. Banks moved away from them when credit became such a commodity. It was a relationship builder, and it certainly was an established understanding that character repaid loans not just a signature.”
Zach Blair, an aide to Ketron, says Ketron introduced the bill to help consumers better manage loans, particularly borrowers who use multiple services.
“A lot of the times consumers were visiting several locations, and some companies were allowing two separate loans, so they were having to pay more,” Blair says.
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The $42 billion-a-year industry outnumbers Starbucks and Burger King in outlets across the country. According to one study, the explosion happened a little more than 10 years ago when the number of payday loan offices increased nationwide from less than 500 in the early 90’s to approximately 12,000 in 2002.
The “pay-day loan bill” that upped the limit in Tennessee this year was sponsored by Sen. Bill Ketron (R-Murfreesboro). The bill also requires a presence in Tennessee for online services and fixes the rate at $15 per $100 loaned.
“It took off in the 90s, and it has exploded not only in Nashville but across the country,” says Kathleen Calligan of the Better Business Bureau of Middle Tennessee. “Unfortunately, so many states have pretty much wrapped their arms around this industry and have given them special privileges and considerations. They don’t have to abide by the rules that other financial institutions have to.”
Loan shops such as Check into Cash or Tennessee Quick Cash are aimed at those who have no or poor credit, the young, the poor and those who live on or near military bases. The industry thrives during bad economic conditions and because banks rarely offer small loans, for years a service consumers relied on for money to tide them over in hard times, Calligan says.
Cleveland, Tenn.-based Check into Cash, for example, is the third largest payday lender in the country. Founded in 1993, it operates more than 1,100 branch locations in 30 states and was founded by W. Allan Jones.
“The traditional banking relationships were pretty much built on the little, short-term, 90-day personal loan,” Calligan says. “They helped a lot of people even as late as the 70s and probably even in the early 80s. Banks moved away from them when credit became such a commodity. It was a relationship builder, and it certainly was an established understanding that character repaid loans not just a signature.”
Zach Blair, an aide to Ketron, says Ketron introduced the bill to help consumers better manage loans, particularly borrowers who use multiple services.
“A lot of the times consumers were visiting several locations, and some companies were allowing two separate loans, so they were having to pay more,” Blair says.
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direct payday lenders
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