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LETTER: Payday Loans Make Financial Sense

Instituting an interest rate cap would eliminate a valuable service to those who need quick credit.


I work for Advance America, a payday lender here in Rhode Island. There is a lot of misinformation about payday loans, but here’s the reality: Every day I help fellow hardworking Rhode Islanders – teachers, first responders, small business owners – meet their financial obligations and support their families. They visit my company for simple, affordable and reliable credit.

A payday loan can make personal and economic sense, especially when compared with unregulated Internet loans, overdraft fees and penalties for missing payments. For every $100 borrowed, our customers pay a flat $10 fee that does not compound interest – whether a customer repays their loan in three days or 30, they pay the same one-time fee. My coworkers and I help customers borrow and repay successfully. And they do – more than 95 percent repay their loans and say they are satisfied with our services.

Instituting a 36 percent rate cap, as some legislators have suggested, would spell the end of this valuable service – by squeezing our fee to pennies per day – without doing anything to address the need for credit in our state or ease the challenges people face. And my job and 80 others are on the line.

Every day, I see the stress on customers’ faces when they enter our center, and their relief when they leave.  I am proud to offer my fellow Rhode Island residents a dependable and cost-competitive credit solution when other financial institutions do not fully meet their needs. 

The General Assembly should keep short-term credit accessible in Rhode Island. 

Donna Rocha
Advance America

Maria Smith February 27, 2013 at 10:11 AM
If you want to know whether pay day loans are predatory, take a look in states that allow video gaming. Drive through any major town in those states and identify the video casinos. Then look to find where the pay day loan services are. Often, you'll find them adjacent one another with clusters of both in lower income areas. Coincidence? I think not. Take a look at the area that surrounds such establishments--they're always the worst-looking area in the general vicinity. If either of these places were to provide some benefit, you'd think that wouldn't be the case. Sadly, the proof is in the pudding. I know of two family members who have used pay day loans. The result was to turn a poor financial situation into a desperate one. More information can be found here http://speedyloansearch.com/payday-loans/

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