Letter to the editor
- PUBLICATION: The Toledo Blade
- DATE: June 5, 2007
Payday advance companies each year help thousands of Ohio families overcome unexpected financial circumstances.
When an air conditioner breaks or a car battery dies, Quik Cash and other responsible personal cash loan lenders provide convenient access to small amounts of money to cover those costs. Banks don't.
While critics, including The Blade, have rushed to label payday lending as "predatory" without ever having defined what "predatory" means, recent studies debunk that myth and underscore the fact that, before restricting or eliminating such short-term credit options, public officials should better understand the consumer demand for such products and the unintended consequences any such restrictions might create.
Indeed, a January study by the Federal Reserve Bank of New York found not only that payday loans were not predatory but that by increasing the supply of credit to an under-served market, they actually enhance the welfare of the households they serve.
Another study found that further regulation of payday lending has the adverse and unintended consequence of reducing credit options for those who may have few alternatives, and that policy makers should encourage competition in the small-loan market, as competition controls prices.
The fast payday loan lending industry's largest trade association, the Community Financial Services Association (CFSA), last month launched a Customer Pledge that includes a $12 million public education and financial literacy campaign and an Extended Payment Plan granting any customer - at any time, for any reason - more time to pay off the cash advance payday loan at no additional cost.
Let's give reasonable, hard-working Ohio consumers access to a variety of regulated credit options and trust them to make financial decisions based on what's best for them and their families.
Keith Jernigan
Regional Manager
QC Holdings
Vogel Drive