Nevada Treasurer Dan Schwartz on Friday suggested that payday lenders are strategically located in low-income neighborhoods and near military bases to target these communities.
But the payday business owners fired back, disputing how their customers are characterized.
“They are hardworking men and women, they have jobs, their average income (is) nearly $40,000, they are teachers, they are nurses, they are firefighters,” said Trent Matson, director of government affairs for Moneytree. “They know they can get a $200 loan for $33 a charge as opposed to having their lights turned off for a $100 hook up fee or have another punishment that may hurt them even more.”
“Our clients are much more savvy than anyone gives them credit for,” Matson said.
Matson said these stereotypes are coming from the consumer groups that have a political agenda.
Another payday lending official agreed.
Maria Miuccio, owner of Cash Kingdom, said, “The more you make, the more you spend. Sometimes these people just happen to have an emergency.”
The meeting was held at the Grant Sawyer Building in Las Vegas. Some six payday business owners attended with Schwartz.
Nevada has no limits on payday loan interest rates. Lenders charge, on average, 652 percent annual interest, according to a Center for Responsible Lending map of U.S. payday loan interest rates.
Schwartz called the meeting, which was termed a payday loan summit, to give payday business owners an opportunity to air their concerns. It was closed to the public.
Peter Novak, CEO and chief legal officer of Cash Factory USA, told Schwartz that even if the state is emphasizing financial literacy, consumers will still take out a loan if they need it.
“They are going to say ‘I don’t have a choice, I have to get that loan anyway,’” Novak said.
“I’m curious to how you would educate them so that prior to showing up on our doorstep or filing online for a loan, they can make decisions where they aren’t led down that path and get into that ‘debt trap’ that everyone is so afraid of.”
Schwartz said everyone at the summit seemed to grasp the issue.
“Payday lenders are of last resort when borrowers have no other access to capital. The problem then becomes when they are trapped in a cycle of debt,” Schwartz said.
“Perhaps, we are going to have to create another avenue to access capital, but the problem then becomes, how do we price money?”
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