This bill, written by Farias, pertains to “requiring that certain notices and disclosures be provided by Credit Access Businesses in foreign languages.” In addition to the current English disclosures that are being provided by Credit Access Businesses to consumers, disclosures in Spanish would be required, as well as other additional languages not yet named. The state may end up listing the languages required and will provide the forms. Would go into effect 9-1-2013. The components of the disclosures would likely be similar to the OCCC Consumer Disclosures in use now.

Click here to view a PDF version of the bill! HB.420.

Over the course of the last several years in different legislative and regulatory settings the topic of banks and their offering of payday loan services to consumers has been discussed and many know of its existence. Some have said that the banks would put the payday loan industry out of business. Well, ahem, it is now in the news that Wells Fargo, US Bank, Fifth-Third Bank, and Regions Bank will no longer be offering Payday Loans to their customers…

I have heard this topic discussed many times and usually by two parties. The first is the consumer advocates; they tout the morality and ethics of the banks and suggest that “banks should offer payday loan services to consumers so they are not taken advantage of by predatory lenders.”

Today, the irony with the termination of the programs at the big banks is that consumer advocates of a different kind have actually managed to cause regulations to be so tight on banks who offer the products, that the banks are making the decision to terminate the programs. Either the opposing consumer advocate groups aren’t communicating or their message cannibalized the topic so much that it killed the product! The lesson here: going for the over-hyped non-empirical consumer advocates and their tear jerking stories will promptly cause an increase in regulation, a decrease in consumer choice, and a decrease in competition. All educated parties agree this hurts the American consumer.

The second group who is pleased to contribute opinions on this issue is representatives of the “payday industry.” They have always said “we welcome the competition.” Today, we are all also saying “I told you so.”

It has always been the general opinion of my peers and I that banks would not survive the payday loan endeavor. We knew that either the regulators would cause the banks too much brain damage or the banks would shut the programs down due to losses or not enough profit. Remember: banks earn $35 in NSF fees on a bounced check which in some cases can result in an APR of 1,600%. Why on earth would they want to operate a program that earns only 200% and causes them all of the regulatory headache?

Give our industry some credit – we run businesses that stand up to assaults from a multitude of angles, yet we still survive and serve customers daily with a smile. Customers sometimes do not pay on their loans! People write bad checks, some outright steal, others defraud! Banks do business with us less and less, consumer advocates hiss and point fingers, regulators get angry, and then the media stokes all the flames.

But in the end, the plain and simple fact remains that many Americans have to claw and fight on a daily basis just to survive. These are our customers, and they truly do need our services. All of the fanfare, ordinances, media stories, heavy regulation, and taxation, cannot change the fact that the need remains, and that it even grows for that matter…

The cruel twist to consumers is that the very regulators, government agencies, and consumer advocates that claim to be fighting for a better outlook are many times the ones that cause the economic harm that sends the average American to a payday store in the first place! Do not forget that the actions of those named above so often cause the job loss, the decreased incomes, or higher health care costs we so often hear about.

My comments on the matter are done for the day thank you for visiting www.CreditAccessBusiness.com! As always, Michael Brown of CAB Consulting can be reached via email at Michael@creditaccessbusiness.com, or via phone at 214-293-8676.