Payday loans & Lane County

OSPIRG recently did another survey on payday loan businesses, this time in Lane County.

The results there were basically the same as those found in Portland last year.

The entire report can be found here.

You can find the report done in November, 2005 in Portland here.

Once again, the survey showed that many places charged more than 500%, with the most common rate being 521%. These rates are only for the typical loan, though. The actual annual percentage rate can far exceed this posted rate.

According to the report:

Most lenders charge a flat fee based on the loan amount even though the length of the loan may only be a few days. Thus, the actual interest rates charged to a borrower can approach and exceed 1000%.

Of the fourteen companies in the county, 10 were from out of state.

Six of the 26 stores did not have "a conspicuous, easy-to-read posting of their annual interest rate, as required by law."

According to the Register-Guard:

"Industry spokesman Thom Shauklas, however, called the report misleading and inflammatory, and said payday loans are more properly viewed as fee-based rather than interest-accruing."

The story also said:

"Auditors are charged with making sure that stores post interest rates as required, Shauklas said. The failure of a handful of stores to post the rates is akin to isolated scofflaws found in any industry, he said."

Apparently Shauklas is only good at counting up profit, as SIX is more than a "handful." It's also just shy of one-quarter of all the stores surveyed-- 21%. This was similar to Portland, in which 24% of the stores did not have rates posted. However, in Portland 24% of stores that did post the APR had signs that were hard to read. It was only 4% of stores in Lane County. This was the only major difference between the Lane County and Portland surveys, as far as I could see.

We shouldn't be surprised, though, as he said that while posting the sign is legally required, it's "silly."

If you get a chance, check out the two surveys. They're a quick read and will give you a crash course in the predatory practices of these businesses.