Article: Community Commentary: Payday loans have an important role to play - Article Date: Wednesday, February 13, 2008

I am Terry Roy and I own Main Street Payday Advance, a New Hampshire-based company with three locations: Claremont, Concord and Lebanon. I grew up in New Hampshire, I live here and I raised my children here.

A payday loan is a small, short-term loan that helps folks when they are in a sudden financial bind. Our customers are average, middle-class working men and women. They are normal New Hampshire folks who are educators, nursing home administrators, health care providers, corrections officers, retired military, construction workers, factory workers, and everything in between. I have given a payday loan to a doctor and to a lawyer. You would be surprised who uses payday loans, if you have not, your neighbor probably has. In fact, in 2006 there were about 150,000 payday loans done in New Hampshire and zero complaints as reported by the Banking Department.

Borrowers must have a steady source of income and an active checking account. We lend between $100 and $500, up to 35 percent of monthly income. The average interest on a payday loan in New Hampshire is equal to $20 per $100 borrowed. We don't do credit checks and 97 percent of our loans are paid on time. If one of our customers truly cannot pay because of severe circumstances such as job loss, we charge them no additional interest or fees and work out a payment plan once they are back to work.

There is mounting evidence in articles and studies done by experts such as:

— Tom Lehman, assistant professor of economics, Indiana Wesleyan University;

— Dean Karlan, assistant professor of economics, Yale University;

— Bart Wilson, associate professor of economics, George Mason University;

— David Findlay, professor of economics, Colby College;

James Meehan Jr., professor of economics, Colby College;

— Charissa Wellford, government of the United States of America, Bureau of Economics;

— Karl Schurter, University of Virginia; and

— Jonathan Zinman, assistant professor of economics, Dartmouth College.

They all concluded that consumers are better off when they have access to payday loans. Study after study, economist after economist have proven that people are helped, not hurt, by payday loans. These are scientific studies done by independent professionals.

Bounced check fees, overdraft protection and credit card late fees are more expensive than payday loans. A $10 checking account error can cost $27, and a $15 late payment on a credit card can cost $37.

Why do New Hampshire Senators want to limit the interest on payday loans, force the industry to shut down and put 200 New Hampshire residents out of work during a recession?

Why do they want to take away this cheaper, preferred credit option, denying access to credit to tens of thousands of average middle-class New Hampshire folks?

Why do they want to increase the number of bounced check fees and credit card late fees paid to banks and credit unions?

Who is looking out for the little guy? Who is looking out for the average, middle-class New Hampshire folks? Not the senators who vote to end payday loans. Their vote would only benefit big banks and credit unions.

Many of our senators may have never needed a $200 loan. Maybe they think that anyone who needs $200 should have no right to retain their dignity through a confidential business transaction. Maybe that is why they say our customers should go to the welfare office, even though most of them will not qualify.

Legislators have compared the middle-class citizens of New Hampshire who use payday loans to "dying corpses" and called our middle-class citizens "vulnerable." A representative from the N.H. Attorney General's office said that government should make this financial decision for our New Hampshire middle-class folks.

I have a lot more faith in the middle-class citizens of New Hampshire. Our middle-class folks are not idiots who need to be protected from themselves. It's time for all citizens of this great state to stand up to the Senators who are so out of touch with the New Hampshire middle class. Call Gov. Lynch, call your senators. Tell them to stay out of your financial decisions. Show them that you are strong; you are not vulnerable, dying corpses who cannot make your own financial decisions.

Terry Roy
Main Street Payday Advance, LLC
Bedford

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