Arkansas two online payday loan companies, reports payday loans max
According to Payday Loans Max, Arkansas’s attorney General sues two online payday loan businesses and their owners.
They claim that these online lenders lending out illegal payday loans with interest rates higher than allowed by Arkansan’s law. These law suits are against Arrowhead Investments Inc., and Galaxy Marketing Inc. Christopher Hodes is holder of both companies so he will also be subject to the law suit.
The law suit was filed in Pulaski County Circuit Court again this individual and his two holding companies accusing him of marketing Arkansas payday loan consumers through various websites lending payday loans with high interest rates some as high as 782 percent!
The lawsuit seeks to prevent the defendants from providing such high-interest loans starting immediately. Also, the defendant will not be able to collect any debt on all loans that were made illegally including the principle.
According to a Payday Loan States article in an industry resource, below are the restrictions on payday lenders in that State:
Legal (For Check Cashers Only)
Max Loan Amount: $500
Max Charge/APR% for a 14 Day Loan ($100): $20/520%
Term: Minimum 14 days
Rollovers Allowed: Two
*Editors Note* – Arkansas has placed tight restrictions on the average payday lender, making it very tough to run a Payday Loan Business in Arkansas. Many people have turned to internet lenders to find access to short-term credit.
Payday lenders unfairly targeted by new reform bill
Proposed financial reform bills currently in congress may result in creation of a new agency called CFPA intended to regulate the financial industry to prevent a similar financial meltdown that had resulted in the economic crisis of 2008. However, these bills may be unfairly targeting businesses and hampering their contribution to the economy.
Payday loan industry and direct payday lenders. Some argue that payday advance lenders were one of the few financial institutions that contributed positively to the economy by allowing cash flow to the average working family.
“Payday advance loans are the easiest and fastest loans to obtain especially during these hard times, but of course they come with a price.” said Paul J. Horner director of finance at a gshloans.com. “Our short term loans helped many borrowers with no credit to get money on demand and avoiding unnecessary overdraft fees and other type of late fees.” It is true that a payday advance loans can be expensive in terms of fees and interest rates but that is because they are considered high risk loans with higher default rates. Many payday advance lenders are reporting millions of dollars will be lost this year because 20 – 40% of borrowers will default on their payments.
Responsible Payday Lenders
Many direct payday lenders have been adopting responsible lending practices while informing and educating their customers about payday loan risks. For example, lendup.com advises customers that payday loans are to be taken for emergencies only and customers with more than two open loans should not and would not be able to qualify for any future loans until the number of loans drop. Many other direct payday lenders have also similar rules and policies in place to both protect both the customer’s and lenders best interests. Yet despite all these self regulations, payday lenders could be over-regulated by a new financial reform bill governed by the CFPA. This could result negatively; stifling payday lending puts a roadblock on consumer financing as well as the economy.
Wells Fargo and Other Major Banks Finance Big Payday Lenders
According to two separate reports Wells Fargo is taking the lead amongst major banks with regard to financing large payday lenders. Following closely, is US Bancorp. and JP Morgan Chase & Co. Up to this point the banks have provided, accumulatively,
more than $2.5 billion in credit to large payday lenders, including those that offer pay day loans online.
This report shows the need for payday lenders to exist. It also gives testimony to the banks’ interests in taking advantage of the payday lending industry in an indirect way with little involvement.
While there are many critics of the pay day lending industry, it is important to know that payday loan businesses are legitimate businesses that contribute to the growth of the economy by providing jobs, paying their fair share of taxes and dues, and help their consumers with fast and quick loans when cash flow is a problem. It is important to distinguish between reputable lenders and other lenders who may be engaging in unethical lending practices.
Direct payday lender provide loans directly to our consumers with no hidden fees. Our loans fees vary based on State rules, regulations, and consumers’ credit with us.
All terms and conditions on our loans are clearly explained by our knowledgeable and professional customer service representatives and are also clearly stated on our contract. When you call our customer service there are no automated machines. Lenders are based here in the US, and loan approval process is almost instant. If consumers are approved, funds are transferred within 1 day.