In reply to News: House panel rejects cap on short-term loan interest February 5, 2008

So, now the military is employing a bank to do what they had the federal government restrict Deferred Presentment Providers (DPP) form doing. It’s the American way to blame someone else for the problems of our society. The Payday Advance industry has been blamed for low morale and interfering with military readiness, or could it be that they don’t have the money to pay the electric bill or that they are facing eviction or gas prices have gone up so high that a gallon of milk has risen to over $4.00. Could it be that they bounced a few checks and now are facing a couple hundred dollars in bank fees. The Navy- Marine Corps Relief Society thinks that $300 every 10 months is going to solve the problem of being over extended from paycheck to paycheck. The problem is that they don’t have a clue as to the needs of the most important asset of this country, our enlisted service personnel.

I came across something disturbing. A customer came in to do an advance. She has done 4 loans with us and hadn’t done an advance with us for over 60 days. We asked the customer to go to her bank and get a transaction history through Wednesday. What I saw was shocking. The customer had a positive balance of approximately $20 at the beginning of 12/24/07. On that day she did 10 transactions, none of which were over $26. That put her in the negative about $105. The next entry was for $385 in NSF fees for 1 day, which now made her negative $490. She was charged an average NSF fee of $37.50 for each transaction. Had she come to us prior to the 24th, she would have paid us just $55 at the most, saving her $330 and probably much more. Chances are, she will not be able to get a loan any where else to cover those fees and she will undoubtedly incur more fees before any money is deposited into her account. She will have no money for 7 to 14 days and what she does get will be debited by the bank for the fees. Most likely she will have to close this account with Wachovia, forcing her to be reduced to having no bank account until all those fees are paid. My concern here is how state legislators can target our industry, which saves customers from such devastating situations in support of a banking system that has created the need for cash advances. This is the same banking system that is looking for a federal bail out because of all the bad loans that they lured low income customers into, who were looking for financial relief. This customer needed our help, because of what the banking system did to her. If any industry needs a legislative make over, it’s the US Banking System.

Talk about predatory. Attorneys in South Florida are suing Payday Loan companies on behalf of clients who signed for loans and did not read the agreement. Next they will be suing banks for tricking the same working class people into signing for sub-prime loans without reading their contract? …or maybe they should sue the bank that signs up a new customer and doesn’t read them the contract that says, “if you bounce a check for even .50 cents, we will charge you $40 every time you do it, which could be 10 to 15 of them in just one day. What about that brand new car a customer bought, do you think the buyer read the loan agreement about the $500 dealer prep fee or the amount of interest they will have paid after 6 years. They company being sued sold their business 6 years ago to Advance America, but the customer just now realized that she felt cheated. I don’t think so. Lawyers went looking for someone that they could con into being their face of the law suit with a promise of a big settlement? Did that same customer read the contract between her and Attorney indicating how much of whatever settlement she will ever see? A customer signs for 22 loans on 22 separate occasions and didn’t read the agreement 22 times when she had the opportunity to do so. The customer stated that she now has more common sense now, so she knows better than to do another payday advance. If that’s true then millions and millions of non-sensical Americans are paying bank fees of in excess of $300 per month versus $35 to prevent them.

The characterization that those of us are thrown into because of the ignorance of those writing about DPP companies is not only unfair, but defamatory.

Lee Bendinelli, Jacksonville, FL

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