Alternatives to Payday Loans

A better way for payday loans, By Anne Stuhldreher, December 21, 2009, Los Angeles Times: “It’s a cycle that seems to repeat itself every legislative session in California. Advocates put forward a bill to curb the predatory practices of payday lenders. Then industry lobbyists squelch the effort, convincing state lawmakers that they’re the lenders of last resort, the only ones who haven’t abandoned low-income neighborhoods. Never mind that the lenders’ generosity comes with quick and costly paybacks — a blizzard of fees that can add up to an annualized interest rate of more than 400%. Indeed, the average borrower ends up borrowing again — and again — trying to pay back that first $300 payday loan, shelling out a shocking $800 for the privilege, according to the Center for Responsible Lending. But there’s finally been a break in the pattern. Last week, San Francisco unveiled a program that communities throughout the state would be wise to follow. It will be the first city in the nation to partner with local financial institutions to market an alternative to the pricey payday loans that are sending too many borrowers into economic spirals…”