Monday, July 01, 2013

PayDay Lending: A NIZ By-Product

Like dandelions, Cash America offices at one time littered the Lehigh Valley, offering short-term, high-interest payday loans to those who can least afford them. People needing quick cash could borrow money and secure their loan with either a post-dated check or a pre-authorized withdrawal. Annual interest rate? Just 368%. The Pennsylvania Supreme Court put a stop to this practice in 2008, and Cash America cashed out.

It's about to make a comeback.

Last year, the state house adpoted legislation that will authorize a 419% APR on a two-week loan passed earlier this month, in a 102-90 vote.

It was opposed by Democrats Joe Brennan, Bob Freeman and Steve Samuelson, as well as Republicans Marcia Hahn and Joe Emrick. Under incredible pressure by party leadership, Hahn called Jennings from the house floor three times before deciding to vote against the legislation.

But Democrat Jenn Mann supported the bill. Why?

Sounding very Republican, she told The Morning Call that government "can't control an individual's finances."

In the Senate, former payday loan opponent Pat Browne is now a payday loan proponent.

Mann and Browne, as you know, are the architects of the NIZ, a special district we now know is only available to the rich developers like gazillionaire J.B. Reilly, not mom-and-pops. To get the support they needed to help out their rich pals, Mann and Browne agreed to support Payday lending.

Browne is now sponsoring a gentler, kinder payday loan bill in the Senate. The APR is only 300%.

He calls it a "micro loan."

CACLV Executive Director Alana Jennings likens that it to stabbing someone in the back and calling it surgery.

Never mind that, from AARP to United Way, payday loans are condemned as just another stepping stone in the march to delinquency on other bills, bank account closures and bankruptcy.

Will this pass? Locally, State senator Lisa Boscola voted No. But since this screws the consumer, just like the NIZ, my bet is it passes.

No Cash Advance offices will be permitted in the NIZ district. But I'm sure they'll be allowed everywhere else.

6 comments:

Anonymous said...

i'm not sure it's fair to blame this on the NIZ.

to be fair, Jen and Pat could have sold their vote for any number of things.

Anonymous said...

just another niz bashing. the payday loan is not the issue - just an easy opening to make a worn out point

this is ohares forte - beating a dead horse

Anonymous said...

Really, cause it sounds like #1 NIZ cheerleader AJ is crediting the NIZ for this one. This is what happens when you turn your back on a snake - it bites you in theass.

Anonymous said...

Thank you Jennifer Mann.

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