weather icon Possible Drizzle

Nevada treasurer says real issue with payday loans is ‘who has access and on what terms’

(This is the fourth story in a series about the payday loan industry in Las Vegas.)

While different groups debate the impact of payday lenders, Nevada is looking at ways to regulate the industry in the Silver State.

Nevada State Treasurer Dan Schwartz recently proposed initiatives he would like to introduce in the 2017 legislative session. He said these suggestions were developed after hosting a summit on payday lending this summer, which featured testimony from those working in the payday lending industry, as well as advocates for more regulation and consumers who spoke about bad experiences taking out loans.

“I don’t have a problem with people needing short-term loans,” Schwartz said. “The real issue is who has access and on what terms.”

Schwartz doesn’t believe current federal regulations are effective enough for payday loans in Nevada, which he said needs its own state regulations on the industry.

One of the first things his office is looking at is instituting a “cooling-off period” of 45 days to allow people to pay off their loans without incurring additional fees.

“Personally, I’d rather give people more time to pay off their loan,” he said, adding that he’s also proposing legislation to create a database of known payday loan users.

“Right now when people can’t pay off their loan, they go across the street to (another lender) to take one out to pay it off,” Schwartz said.

This puts people into a debt cycle as they continue to collect loans they can’t pay off. A database would help that, he added.

He also desires legislation to specifically look at payday loan practices surrounding veterans and educators, two groups that are often the target demographic for payday lenders.

“As frequent victims of predatory loan practices, they deserve better than they get when their cash needs fall short,” Schwartz said. “These individuals have served our country and our youth. Our (second) bill seeks to use the previously established public benefit corporation model to assist when unforeseen accidents and needs arise.”

This would essentially help teachers or veterans find alternative funding instead of payday loans.

He added this is a good starting point and — depending on how those communities benefit — might be expanded upon.

Despite having high interest rates — Nevada is known to have one of the highest interest rates for payday lending at 526 percent — Schwartz said he won’t be looking into regulating those rates.

“The reason I’m not advocating (for an interest rate cap) is because I don’t think that’s the problem,” he said. “I think we need to look at the deeper problem.”

Schwartz also said one argument he has heard against regulating interest rates is that the industry has to charge higher rates to contend with the percentage of people who don’t pay back their loans.

AJ Buhay, field director of the Progressive Leadership Alliance of Nevada (PLAN), said while regulation is a step in the right direction, the current proposals aren’t enough.

“What we expect from our state treasurer is that he will do what it takes to protect Nevadans — not just some — and that he will push for legislation that will protect consumers from the predatory and toxic practices of the payday loan industry,” Buhay said.

He added that the legislation currently proposed by Schwartz was a “tepid attempt to regulate an industry that takes out almost $8 billion a year from our community.”

“He can, and should, do more,” Buhay said of Schwartz.

PLAN is waiting to see how the proposed legislation’s language develops before the new legislative session.

“We want to see laws that will have a big impact on people’s lives, specifically an interest rate cap,” Buhay said. “This is already law in 15 other states and is something even Deputy Treasurer (Sheila) Salehian has stated that we needed in Nevada. We’ll wait to learn more and will work hard to push (Schwartz’s) office and all elected officials to finally curtail predatory lending in Nevada.”

The Consumer Financial Protection Bureau is calling for federal action to further regulate payday loans. The agency advocates for various policies to help protect consumers from unfair, deceptive or abusive financial practices.

“The Consumer Bureau is proposing strong protections aimed at ending payday debt traps,” said bureau director Richard Cordray. “Too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt. It’s much like getting into a taxi just to ride across town and finding yourself stuck in a ruinously expensive cross-country journey.

“By putting in place mainstream, common-sense lending standards, our proposal would prevent lenders from succeeding by setting up borrowers to fail.”

The bureau is looking to add regulations such as a full payment test, which would require lenders to determine whether the borrower can afford the full amount of each payment when it’s due and still meet basic living expenses and major financial obligations.

Amy Cantu, a spokeswoman for the Community Financial Services Association of America (CFSAA), said that while the organization — which represents short-term lenders — advocates for regulations, it thinks they should come at the state level.

“The CFSAA always advocates for regulations that promote consumer protection,” she said. “What works in Kentucky might not work in Florida. Each state should decide what works best for them.”

Cantu said regulations should make the distinction between legitimate payday lenders — which allow people with no or poor credit to access money — and illegal lenders. “They operate offshore and give the entire industry a (bad) rap,” she added.

Cantu added that if the regulations are too strict on legitimate lending agencies, it forces payday lenders to shut down.

“And that leads to the use of online lenders, who give the industry a bad reputation,” she said.

The CFSAA advocates for best practices such as extended payment plans or full disclosure in advertisements.

As of right now, regulations being proposed on a federal level have not been implemented.

For more information on the Consumer Financial Protection Bureau, visit consumerfinance.gov.

For more information on the Community Financial Services Association of America, visit cfsaa.com.

To reach Henderson View reporter Michael Lyle, email mlyle@viewnews.com or call 702-387-5201. Find him on Twitter: @mjlyle.

Don't miss the big stories. Like us on Facebook.
Politics Videos
Doors open for Nevada Democratic caucuses - VIDEO
Caucusgoers are lining up Saturday morning to take part in the Nevada Democratic caucuses across the state (Renee Summerour/Las Vegas Review-Journal)
It’s caucus day in Nevada
Democrats will gather at over 250 locations across the state to declare their presidential preferences.
Elizabeth Warren holds rally with Julian Castro
Elizabeth Warren held her Get Out the Caucus Block Party with Secretary Julián Castro at the Clark County Government Center Amphitheater.
Trump caps western swing with campaign rally in Las Vegas
President Trump speaks to an enthusiastic crowd of thousands gathered at the Las Vegas Convention Center during a tour across the western United States.
Anti-Trump Protestors at LVCC Rally - Video
President Trump speaks at a Keep America Great rally as a small group of protesters gather outside the Las Vegas Convention Center.
Thousands gather for Trump rally
Thousands showed up for President Donald Trump’s rally Friday morning, forming a line that stretched nearly a quarter mile around the Las Vegas Convention Center.
Trump supporters camp outside the Las Vegas Convention Center
Trump supporters camp outside the Las Vegas Convention Center on Thursday, Feb. 20, 2020, where President Trump will held a rally on Friday in Las Vegas. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
President Trump lands in Las Vegas - VIDEO
Donald Trump landed in Las Vegas on Tuesday, Feb. 18, 2020, as part of a four-day western state swing. (James Schaeffer/Las Vegas Review-Journal)
Long lines during early voting in Las Vegas - VIDEO
The final day of the Nevada Democratic Party’s early presidential caucuses wrapped up Tuesday, as thousands of Democrats lined up at 55 locations around the state for their last shot at filing an early preference card before the traditional caucuses on Saturday. Long lines were seen at CSN Charleston in Las Vegas. (Alexis Egeland/Las Vegas Review-Journal)
Last day for early voting at Culinary Union - VIDEO
Voters were still in line just before 8 p.m. Tuesday, Feb. 18, 2020, as early voting in the Nevada Democratic Party caucuses came to a close. (Shea Johnson/Las Vegas Review-Journal)
Pigeons wearing MAGA hats in Las Vegas - VIDEO
A flock of pigeons wearing Make America Great Again hats and one sporting a Donald Trump hairdo invaded downtown Las Vegas late Tuesday, following their release by an anonymous group: P.U.T.I.N. (Pigeons, United to Interfere Now). (Las Vegas Review-Journal)
Tuesday is last day to early vote in Nevada Democratic caucuses - VIDEO
Early voting in the Nevada Democratic caucuses ends Tuesday, with sites open throughout Clark County. (Michael Quine and James Schaeffer / Las Vegas Review-Journal)
Democratic candidates Elizabeth Warren and Tom Steyer talk pay for child care workers - Video
Elizabeth Warren and Tom Steyer talk to care in action about the importance of Medicare for All, paid leave and child care. (Nathan Asselin/Las Vegas Review-Journal)
Elizabeth Warren barnstorms Nevada ahead of caucuses - VIDEO
Warren is trying to drum up enthusiasm about her campaign after finishing fourth in the New Hampshire primary. Her rally drew about 400 people to the student union of the College of Southern Nevada’s Henderson campus. (James Schaeffer / Las Vegas Review-Journal)
Sen. Jacky Rosen encourages early voting at Culinary Workers 226 - VIDEO
Sen. Jacky Rosen, D-Nev., spoke to those casting early caucus votes at the Culinary Workers hall on Monday, Feb. 17, 2020. Early voting in the Nevada Democratic caucuses continues Tuesday. The Nevada Caucuses are Saturday, Feb. 22. (Michael Quine/Las Vegas Review-Journal)
2020 candidates rally in Southern Nevada ahead of caucus - VIDEO
2020 candidates Joe Biden, Elizabeth Warren and Bernie Sanders held rallies all over Southern Nevada on Saturday ahead of the Democratic caucus. (James Schaeffer / Las Vegas Review-Journal)
First day of early voting - VIDEO
Nevada Democrats turned out in force on Saturday for the first day of early voting in the Democratic presidential caucuses.
Biden and Sully Sullenberger speak in Henderson - VIDEO
Presidential candidate Joe Biden and famed pilot Sully Sullenberger spoke at Sun City MacDonald Ranch to get out the vote for early voting for the Nevada caucus. (James Schaeffer / Las Vegas Review-Journal)
Nevada Poll: Bernie Sanders leads Democratic presidential candidates - VIDEO
Vermont Sen. Bernie Sanders leads the presidential field by a solid margin among likely Democratic caucus-goers heading into Nevada’s four-day early voting period, with with 25 percent of respondents expressing support. (Renee Summerour/Las Vegas Review-Journal)
Nevada Poll: caucus vs. primary - VIDEO
A new Nevada Poll finds two-thirds of likely Democratic caucus-goers surveyed in a Review-Journal poll say they’d like to see Nevada replace its caucuses with a secret-ballot primary election to determine support for a presidential nominee. (Renee Summerour/Las Vegas Review-Journal)
Caucus events Leading up to Caucus Day 2020 - VIDEOl
As presidential candidates make their way to Las Vegas, here's a look at events, dates and times for the days leading up to Nevada's Caucus Day 2020 on Feb. 22. (Las Vegas Review-Journal)
Election 2020: Nevada Caucus and Early Voting - Video
AARP's Nevada Caucus discussion with Steve Sebelius about the Nevada Caucus and early voting.
Caucus 101: Early voting in the Nevada Democratic caucus - VIDEO
The who, what, when, where and hows of early voting before and on caucus day in Nevada. (Renee Summerour and Bizuayehu Tesfaye /Las Vegas Review-Journal)
Election 2020: Nevada Caucus - Video
AARP's Nevada Caucus Discussion with Steve Sebelius. Join us as we discuss the Nevada Caucus process.
Dina Titus speaks on Biden and Nevada's importance - VIDEO
Nevada Congresswoman Dina Titus sat down with political reporter Rory Appleton to discuss Joe Biden and Nevada's place in the 2020 election.
Las Vegas ready to enforce homeless camping ban - VIDEO
Las Vegas police will begin enforcing a controversial camping ban on city streets on Saturday, but officials say they expect to impose the penalties available under the new ordinance only in rare instances. (James Schaeffer / Las Vegas Review-Journal)
Nevada Caucus 101: How to caucus - VIDEO
How does the caucus work in Nevada? Shelby Wiltz, the caucus director for the Nevada State Democratic party takes us through the process. (Renee Summerour and James Schaeffer/Las Vegas Review-Journal)
Trump administration OKs new water rule - VIDEO
Environmental Protection Agency Administrator Andrew Wheeler signed a new rule Thursday replacing a 2015 definition of “navigable waters” created in the Obama administration that farmers, developers and others found overly restrictive. (James Schaeffer / Las Vegas Review-Journal)
Yvanna Cancela Speaks on Supporting Biden - Video
The RJ Politics podcast crew sits down with Nevada State Senator Yvanna Cancela to discuss why she is supporting former Vice President Joe Biden in the 2020 presidential race.
RJ Politics Podcast with Deval Patrick - VIDEO
2020 Presidential Candidate Deval Patrick joins hosts Rory Appleton and Steve Sebelius on the RJ Politics Podcast.
Tom Steyer on Donald Trump and the economy - Video
Tom Steyer joins the RJ Politics podcast to talk about his campaign presence in Nevada and how he plans to take Trump on when talking about the economy. (Las Vegas Review-Journal)
Las Vegas City Council Votes On Homeless Ordinance - Video
The Las Vegas City Council on Wednesday will discuss expanding on a controversial camping and sleeping ban aimed at deterring the homeless from bivouacking on city streets to include hours when public sidewalks are being cleaned.
Biden meets with Vegas Latino community - VIDEO
Presidential candidate Joe Biden met with members of the Latino community at Rancho High School. (James Schaeffer / Las Vegas Review-Journal)
Henderson, other Nevada cities consent to refugee resettlement - VIDEO
Henderson will continue to welcome refugees for resettlement, according to a December letter from Mayor Debra March. (James Schaeffer / Las Vegas Review-Journal)
Pete Buttigieg Speaks At Black Empowerment Event - Video
Pete Buttigieg speaks at a black empowerment event to talk about his Douglass plan.
Joe Biden at the national hospitality workers union.
Democratic presidential candidate, former Vice President Joe Biden speaks to members of the national hospitality workers union during UNITE HERE's town hall on Wednesday, Dec. 11, 2019 at Culinary Union Hall in Las Vegas. @bizutesfaye
Elizabeth Warren at Culinary Union
Elizabeth Warren speaks at a Culinary Union town hall in Las Vegas on Dec. 9, 2019.
Secretary of Education visits Henderson school
Secretary of Education Betsy DeVos visited students at Pinecrest Academy in Henderson to talk about college planning on Dec. 4, 2019. (Erik Verduzco/Las Vegas Review-Journal)
Trump dropped from Terry Fator’s show on Las Vegas Strip - VIDEO
Fator has edited out one prominent figure: President Donald Trump, a focal point of Fator’s regular stage show and also Christmas show over the past 3½ years. The Trump puppet, with his pop-up hairpiece, has been sidelined from both shows until further notice. (James Schaeffer / Las Vegas Review-Journal)