A recent letter to the editor (“Support Curbs on Payday Lending Interest Rates,” Mar. 23, 2012) presents a misguided argument for regulations that would do more harm to consumers than good.
When facing a financial shortfall, Rhode Islanders make borrowing decisions based on their personal and economic interests. For many, a payday advance, with its one-time fee of $10 per $100 borrowed, serves as an affordable tool for overcoming such challenges, especially when compared with more expensive options such as overdraft fees, unregulated Internet loans or missing a bill payment.
While any form of credit can be abused or misused, our experience shows that most customers use payday advances responsibly: Over 95 percent of Advance America customers repay their loans on time. We work with all customers to help them be successful borrowers, including those unable to repay by their due date, and offer an Extended Payment Plan at no additional charge.
Effectively eliminating this valued credit option with a 36-percent rate cap will not remove hardworking Rhode Islanders’ need for affordable, reliable and transparent short-term credit, and will only drive them to less-regulated, more expensive credit options. It is vital that the Rhode Island State Legislature preserve this valued credit option.
Jamie Fulmer, Vice President-Public Affairs
Past articles on this topic:
- , Mar. 23, 2012
- Payday Lending Part 2: A National Debate, Jun. 17, 2011
- , Jun. 16, 2011