Welcome to the CIC Media Center, a source of timely and accurate information about Check Into Cash and the payday loan industry. This site shows how responsible payday lenders and CFSA-member companies are providing consumers with a much-needed financial service. We are dedicated to preserving our customers’ financial freedom of choice and encouraging their fiscal responsibility.
Payday Lending NewsFederal Reserve Bank of NY Study Shows Banning Payday Loans Harms Customers Payday Lenders: Heroes or Villains?
|
An article by CEO Allan Jones Showing Comparisons of Payday Advance Industry Profit Margins 'Modest' Compared To Banks and Other Fortune 500 Group Members
The Center for Responsible Lending (CRL) is attempting to limit payday loans to 36% APR. While to the uninformed person this sounds fair, APR is a misleading number on micro-loans (extremely small amounts of money for very short lengths of time). Assuming a fee of $15 for $100 payday advance for 14 days has an APR of 390% . The math is $15 x 26 = 390. To quote a 365-day rate on a 14-day transaction is misleading. To see the real facts, you would have to convert all the pay day loan company expenses to APR .
Click to see the actual income and expenses of five publicly-traded pay day loan companies quoted in APR only.
Credit Unions who operate tax free and even government-owned credit unions such as the Navy, Pentagon, or State Employees are unable to offer the payday product because of its low margins. While the five publicly-traded payday companies earned an average of 6.6% to the bottom line, these government-owned credit unions earned 13.63% or earned 106% more to the bottom line than the payday companies. Assuming a $15 fee on a $100 payday advance in 2005 earned an average of 6.6% or 99 cents. These credit unions, on the same $15 in fee income; earned an average of $2.04.The math is $15 x 6.6 = .99. The math: $15 x 13.63 = $2.04.
Click here to see the Credit Union Comparison Chart
In 2005 Self Help Credit Union earned 174.2% Higher Bottom-Line Profit Than The Payday Industry It Criticizes
Hypocritical or Not? ---You Decide
The Center for Responsible Lending (CRL) is a wholly-owned subsidiary of the Self-Help Credit Union headed by Martin Eakes of Durham, NC While the Self-Help Credit Union, through CRL, criticizes the payday advance industry as being predatory and creating a “cycle of debt,” his credit union continues to charge $20 for overdrafts but does not offer a competing payday product. Eakes' hypocritical attacks on the micro-lending industry are best shown by comparison percentage of bottom-line profits of five publicly traded payday advance companies to his credit union rates. Assuming a $15 fee for $100 advanced, which is an average fee per hundred for a payday advance, compared to CRL earnings, payday industry average is 6.6% compared to 18.1% for the Self-Help Credit Union for the 12 months ending 2005. The math: $15 fee x 6.6% = .99. The math: $15 fee income x 18.1% = $2.72. Basically for every dollar payday earns, the Self-Help Credit Union earns $2.72 or 174%.
Click here to view the Real Profit from an Average Payday Advance Fee
Research on Payday AdvanceThis 2004 study, conducted by an independent firm, the Cypress Research group, was commissioned by CFSA to determine customer satisfaction with payday advance.
|
Shattering the Myth of "Cycle of Debt" and Rollovers:
Real Math Tells the Real Story
Why would anyone pay 335% more for coffee?
Checklist: The Independent Magazine for
Neighborhood Finical Service Providers article
"Letter From the Editor" highlights of Allan Jones'
presentation at the CFSA Annual Meeting
|
The information on this page can be downloaded in its entirety by clicking here OR
|
