66°F
weather icon Mostly Cloudy

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
Kamala Harris campaigns in Las Vegas
Democratic Sen. Kamala Harris castigated President Donald Trump’s merit-based immigration plan, saying it was “short-sighted” and overlooked the cultural significance of family, during a campaign stop in Las Vegas. “We cannot allow people to start parsing and pointing fingers and creating hierarchies among immigrants,” Harris told Asian Pacific Islander leaders at a Chinatown restaurant, one of two appearances she made Thursday.
The Right Take New Education Funding Plan - VIDEO
On Monday, Senate Education Committee chair Mo Denis, D-Las Vegas, released a new education funding formula. For years, many Democrat politicians have criticized the current education funding formula, called the Nevada Plan. They claim it’s old and outdated. Their biggest beef is that it doesn’t allocate more money for students who are English Language Learners or live in poverty. The theory is that it’s harder to educate those students and so they need additional services, which costs additional money.
Kamala Harris campaigns in Nevada
California Senator Kamala Harris meets with One APIA Nevada, a nonprofit organization that advocates for policies empowering Asian Pacific Islander Nevadans. (Michael Quine/Las Vegas Review-Journal)
Ben Carson talks housing (Audio only)
Ben Carson discusses housing with the Review-Journal editorial board on Thursday. (Audio only)
Ben Carson visits the RJ (Full Audio Only)
Ben Carson discusses housing with the Review-Journal editorial board on Thursday. (Audio only)
Former Vice President Joe Biden campaigns in Nevada
After campaigning at the International Union of Painters and Allied Trades District Council 16 in Henderson, former Vice President Joe Biden spoke with the Review-Journal.
Student serenades Mayor Carolyn Goodman at swearing in
Students from the school she founded, The Meadows School, serenaded Las Vegas Mayor Carolyn Goodman during a swearing in ceremony for her third and final term. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Al Gore Speaks At UNLV About Climate Change - Video
Former Vice President of the United States Al Gore talks to an audience at UNLV about the effects of Climate change and how to switch to renewable sources of energy.
Forum on Wages and Working People Highlights - VIDEO
Presidential candidates Elizabeth Warren, Beto O'Rourke, Kamala Harris, Amy Klobuchar, Julian Castro, and John Hickenlooper speak in Las Vegas, Nevada.
Nevada Politics Today Valerie Weber - VIDEO
Valerie Weber sits down with Victor Joecks to discuss her policies and why she is running for Ward 2 of the Las Vegas City Council.
Cory Booker speaks at UNLV
US Senator Cory Booker speaks at UNLV during a Young Democrats meet and greet on Thursday, April 18, 2019. (Mat Luschek / Review-Journal)
May-Brown describes why some with disabilities need the subminimum wage - VIDEO
Eliminating the subminimum wage will end training and work opportunities for some members of the disabled community. Instead of doing something productive, they would be relegated to adult day care. That’s according to Tracy May-Brown, Opportunity Village’s director of advocacy, board and government relations.
Commission’s decision will delay Red Rock Canyon development
The Clark County Commission Wednesday rejected a developer’s request to approve a preliminary plan for 3,000 homes overlooking Red Rock Canyon before a federal agency grants permission for a roadway leading to the site.
Clark County commissioner calls on landlords to bring properties up to code
Clark County Commissioner Tick Segerblom has called on landlords in older parts of the valley to bring their properties up to code and keep them well-maintained or face the prospect of inspections, fines and citations. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Harry Reid speaks out against anti-Semitism
Unnerved by the rise in anti-Semitic hate speech and the general pervasiveness of bigotry, including in Nevada, former U.S. Sen. Harry Reid organized an educational forum at UNLV on Thursday as part of his call to unite people against it. (Shea Johnson/Las Vegas Review-Journal)
President Trump speaks to the Republican Jewish Coalition in Las Vegas
President Donald Trump spoke at the Republican Jewish Coalition’s National Leadership Meeting in Las Vegas and updated on Israeli relations. (Heidi Fang/Las Vegas Review-Journal)
Trump says border wall will have 'hundreds of miles' built by end of next year
President Donald Trump spoke at the Republican Jewish Coalition’s National Leadership Meeting in Las Vegas and discussed the progress of the border wall and the current relations there. (Heidi Fang/Las Vegas Review-Journal)
Protesters disrupt Trump's speech
Just as President Donald Trump started to make his opening remarks during his appearance at the Republican Jewish Coalition’s National Leadership Meeting, protesters disrupted his speech. (Heidi Fang/Las Vegas Review-Journal)
Roerink On The Problems With Taking Water From Eastern Nevada - Video
The Southern Nevada Water Authority wants to take billions of gallons of water that doesn’t exist from Eastern Nevada via a pipeline that would cost ratepayers $15 billion. Doing so would devastate the wildlife and people who live there. That’s according to Kyle Roerink, executive director of the Great Basin Water Network, which opposes the pipeline.
Las Vegas Election Night Wrap-Up
The Review-Journal's Politics and Government Editor, Steve Sebelius, wraps up election night. (Mat Luschek / Review-Journal)
Olivia Diaz Speaks To Ward 3 Supporters After Primary Election - Video
Olivia Diaz speaks to her supporters at a election party after results started coming in for the Ward 3 primaries.
Oscar Goodman Speaks On Behalf Of Mayor At Primary Win (edited)
Oscar Goodman spoke Tuesday night on behalf of his wife, Carolyn, who won the mayoral primary election. (Mat Luschek / Review-Journal)
Oscar Goodman Speaks On Behalf Of Mayor At Primary Win (Full)
Oscar Goodman spoke Tuesday night on behalf of his wife Carolyn, who won the mayoral primary election. (Mat Luschek / Review-Journal)
Gun Debate Shows Limits Of Government - Video
On Monday, the Assembly and Senate Judiciary Committees held a joint hearing on Assembly Bill 291. It would ban bump stocks and allow local governments to pass additional restrictions on firearms.
Lucy Flores speaks out about Biden incident
Former Nevada assemblywoman, Lucy Flores, expresses her feelings about an incident with former Vice President Joe Biden in 2014. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Harry Reid takes the stand in injury lawsuit
Former U.S. Sen. Harry Reid took the stand on Thursday in the product liability lawsuit brought against the makers of a resistance exercise band that Reid blames for blinding him in one eye.
Jurors hear opening statements in Reid personal injury trial
Opening statements were made on Tuesday in the product liability lawsuit brought by Harry Reid against against the makers of a resistance exercise band that Reid blames for blinding him in one eye.
Mayor Goodman delivers Meals on Wheels
Mayor Carolyn Goodman delivers Meals on Wheels to seniors on March 26, 2019.
Las Vegas City Council Ward 1 race
Candidates for Las Vegas City Council Ward 1. (Shea Johnson/Las Vegas Review-Journal)
Beto O’Rourke campaigns in Las Vegas
Democratic presidential candidate and former Texas congressman Beto O'Rourke addresses attendees during a campaign stop at Arandas Taqueria in Las Vegas on Sunday, March 24, 2019. (Chase Stevens/Las Vegas Review-Journal)
Beto O'Rourke House Party in Las Vegas
Democratic presidential candidate Beto O’Rourke delivered a message of unity inside a Las Vegas living room Saturday night, outlining a mission to bridge the divide in a polarized America and rally behind “big defining ambitions that we have in common.” (Shea Johnson/Las Vegas Review-Journal)
Presidential candidate Kirsten Gillibrand talks at Atomic Liquors
Democrat presidential candidate Kirsten Gillibrand talks to her supporters at Atomic Liquors.
Presidential candidate Gillibrand meets with UNLV Immigration Clinic student attorneys
Democratic presidential candidate Sen. Kirsten Gillibrand, D-N.Y., meets with UNLV Immigration Clinic student attorneys at her first stop in Nevada as a candidate Thursday, March 21, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Sen. Catherine Cortez Masto promotes the Rebuild America’s Schools Act
U.S. Sen. Catherine Cortez Masto, D-Nev., co-sponsor of the Rebuild America’s Schools Act, speaks at Hoggard Elementary School in Las Vegas to promote the bill that would provide $100 billion for infrastructure improvements at schools across the country. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Scholar Max Eden on how restorative justice decreases student achievement - VIDEO
Across the country, restorative justice is lowering test scores and increasing the number of students who feel unsafe at schools. That’s according to Max Eden, a senior fellow with the Manhattan Institute, who recently released a study discipline reform.
NV Dems Want To Gut Read By Three - Video
Nevada’s students have a major problem. They aren’t very good at reading. In 2017, just 31 percent of fourth graders were proficient at reading according to the National Assessment of Education Progress. The number proficient falls to 28 percent in eighth grade. Read by Three could change that. If a student can’t read at grade level by the end of third grade, he repeats the grade.
Presidential hopeful Tulsi Gabbard stumps in Las Vegas
Presidential hopeful U.S. Rep. Tulsi Gabbard, D-Hawaii, holds a meet and greet at the Asian Culture Center in downtown Las Vegas Monday, March 18, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Nye County pushes back against state gun bill
Gun store owner Robby Brentlinger and John Koenig, Chairman of the Nye County Board of Commissioners, discuss their thoughts on gun rights and Nevada Senate Bill 143. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Atkinson pleads guilty
Former Nevada Senate Majority Leader Kelvin Atkinson pleaded guilty to a federal wire fraud charge Monday.
Atkinson pleads guilty to wire fraud charges
U.S. Attorney’s Office announces plea deal for charges against former Nevada Senate majority leader Kelvin Atkinson during a press conference on Monday, March 11, 2019. (Michael Quine/Las Vegas Review-Journal)
Former Nevada Senate Majority Leader Kelvin Atkinson pleads guilty
Former Nevada Senate Majority Leader Kelvin Atkinson pleaded guilty to a federal wire fraud charge Monday, less than a week after resigning from his post. (Mat Luschek/Review-Journal)
Melania Trump Speaks Out About Opioid Epidemic - VIDEO
Melania Trump speaks at the Westgate hotel about the Opioid epidemic in the United State and how this generation can be the group that ends it.
Nevada Legislative Session Preview: Education, Yucca Mountain and Microchips
The Nevada Legislature will be meeting to look at new bills that involve education and marriage age restrictions. Governor Sisolak has also requested to meet with the White House about the plutonium shipments sent to Nevada.
Cortez Masto, Rosen For Infanticide - VIDEO
If an abortionist — armed with scissors, clamps and a vacuum cleaner — can’t kill a baby while she’s still in the womb, he shouldn’t get another chance after she’s born. Catherine Cortez Masto and Jacky Rosen disagree.
Abortion Bill Would Decriminalize Causing A Pregnant Woman To Miscarry - VIDEO
If abortion advocates believed their own rhetoric, they’d oppose the Trust Nevada Women Act.
Las Vegas city council candidate Diaz talks about Badlands, public safety and homelessness
The residents of Las Vegas’ Ward 3 aren’t thinking about the development issues surrounding Badlands golf course. They do, however, want more neighborhood police patrols to increase public safety. Other jurisdictions should help the City of Las Vegas with its growing homelessness population. That’s according to former Assemblywoman Olivia Diaz who’s running for the Ward 3 city council seat.
Nevada State Senate Looks At Red Light Cameras - VIDEO
The Nevada State Senate looks at a bill that will add red light cameras to all of the traffic lights in Las Vegas.
THE LATEST