The Advoc8te has always been strongly opposed to pay day loan companies and check cashing companies because they take advantage of poor, disadvantaged people when they are the most desperate. A 360% annual interest rate is nothing short of criminal. The Adv0c8te would be happy when they would be removed all together from River East or at least very strictly reformed. They can start with the Ace Check Cashing located on MLK Ave and Malcolm X.

Some facts from the Americans For Fair Lending website:

Payday Loan Facts and Stats
Payday loans cost consumers over $4.2 billion in predatory fees each year.

The typical payday borrower pays back $793 for a $325 loan.

Ninety percent of the payday industry’s revenues come from consumers who get five or more loans in a year.

For two-week payday loans, finance charges result in interest rates from 390% to 780% APR. The first APR is for a fee of $15 per $100 borrowed, the second APR results from a fee of $30 per $100 borrowed.

The fifteen states (and DC) which have banned payday lending, are saving their residents a total of $1.8 billion per year in predatory payday loan fees.

There are more payday stores in the United States than McDonalds restaurants. At the start of start of 2008, industry analysts claimed that about 23,600 payday storefronts in operation.

Payday Loan Abuses
Rollovers: The average borrower pays a fee of $18 per $100 borrowed, borrows $325, and rolls over the loan eight times before finally paying it off. This average borrower will end up paying back a total of $793 for a $325 loan. If the borrower can't pay back the loan when it is due, he or she doesn't get any more money, but pays another fee to roll the same loan over and avoid overdrawing. Ninety percent of payday lenders’ profits come from loans that are rolled over.

False threats: Payday lenders sometimes threaten borrowers with criminal prosecution for writing “bad” checks. In fact, there is nothing illegal about writing these checks (if there were, payday lenders would be aiding and abetting a crime each time that they told a borrower to write a post-dated check). .Nevertheless, many consumers are terrified by these false threats of criminal prosecution.

Internet lending: Using the Internet to borrow money increases the possibility of harm to the borrower. Internet lenders are generally not physically located in the borrower’s state and often aren’t even based in the U.S. They may lend over the Internet in order to avoid the protections of applicable state laws and to make it virtually impossible for the borrower or any government agency to find them. In addition, borrowing over the Internet increases the chances of identity theft and other privacy violations.

Disguised loans: Some payday lenders pretend that they are selling goods or services in exchange for a check. Others engage in “sale-lease” shams where the lender will “buy” some item of personal property and lease it back for a “rental” payment due in two weeks. This differs from what a pawnbroker does because the lender doesn’t hold onto the item involved

Attorney General Peter J. Nickles announced today that the District has filed suit against CashPoint, a money lender that issues consumer loans by securing a motor vehicle title. CashPoint is operated under the Virginia based corporation, Dominion Management Services, Inc.