- Rise in loans linked to cars is hurting poor, By Jessica Silver-Greenberg and Michael Corkery, December 25, 2014, New York Times: “The rusting 1994 Oldsmobile sitting in a driveway just outside St. Louis was an unlikely cash machine. That was until the car’s owner, a 30-year-old hospital lab technician, saw a television commercial describing how to get cash from just such a car, in the form of a short-term loan. The lab technician, Caroline O’Connor, who needed about $1,000 to cover her rent and electricity bills, believed she had found a financial lifeline…”
- Churches step in with alternative to high-interest, small-dollar lending industry, By Rebecca Robbins, January 9, 2015, Washington Post: “Every month for about three years, Nina McCarthy followed the same routine after payday. She’d go into a Check Into Cash near her home in the Richmond area, and pay off an open-end loan for $700 or $800 – and then she’d take out a new one for the same amount, never accumulating interest in the process. Then McCarthy’s overtime hours at work were cut. With rent, a car payment and a 3-year-old granddaughter to feed, McCarthy didn’t have $700 for Check Into Cash. McCarthy made a partial payment, but interest piled up rapidly, at a rate she recalls was 24.9 percent a month, or a nearly 300 percent annualized rate…”
Tag: Title loans
Car Title Lending – Virginia
First-ever data shows 25,000 car title loans worth $21M issued in last 3 months of 2010 in Va, By Dena Potter (AP), Washington Post: “Virginia car title lenders doled out nearly 25,000 loans worth more than $21 million in the last three months of 2010, according to data collected for the first time since the state started regulating the lenders. Car title lenders were unregulated in Virginia until October, when a new law took effect that limited how much the companies can charge, how much they can lend and for how long. Despite the protections, more than 3,500 borrowers missed payments for at least 60 days during those three months, and nearly 200 had their vehicles repossessed. Meanwhile, the new State Corporation Commission data shows that laws enacted in 2008 to curb the repeated use of their close cousin, payday loans, have dramatically reduced their use. Both are short-term loans that charge borrowers triple-digit interest rates. Payday loans hold a paycheck as collateral for a loan, whereas a car title loan uses a vehicle…”