Rolling over borrowers: preventing exorbitant refinancing as well as other necessary alterations in the cash advance industry

Rolling over borrowers: preventing exorbitant refinancing as well as other necessary alterations in the cash advance industry

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In 1993, W. Allan Jones started making tiny, short-term loans in return for a postdated check written for the combined value associated with loan and a site cost. (1) This training was not seen for over half of a century, when “salary lenders” provided short-term loans for tiny amounts in return for a paycheck that is future. (2) In 1999, simply six years after Mr. Jones resurrected the payment that is deferred, popularly known as the pay day loan industry, payday lenders issued about $8 billion worth of pay day loans. (3) In 2004, the industry made $50 billion in loans, (4) an astounding 525per cent rise in simply 5 years. That same 12 months, it had been calculated that the industry charged $3.4 billion per year in costs, such as for example interest and finance costs, to cash advance borrowers. (5)

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