Family First Federal Credit Union has launched a new financial product hailed as "The Alternative to Payday Loans." Here's the link.

Apparently, if you call it a "Participation Fee," you can charge as much as you want. Of course, I'm sure it has more to do with the fact that this is a Credit Union and they're protected by the Federal Reserve and not required to disclose APR in the same way that the Payday Loan industry is.

Here's a breakdown...

a $100 "Instacash Loan" for 1 month costs: $1.48 "interest" + $30.00 "fees" = $31.48

a $100 Payday Loan for 2 weeks costs: $15.00

Looks the same, smells the same... Reminds me of a line from Shakespeare's Romeo and Juliet:

"What's in a name? That which we call a rose
By any other name would smell as sweet."
-Romeo and Juliet (II, ii, 1-2)

After a recent comment posted by one of our members, I was very interested in analogies that might apply to the hypocrisy that is plaguing recent legislation that affects the Payday Loan industry.

Analogies are basically comparisons that make reference to something that is difficult to grasp (this whole APR concept, in our case) in terms that are practical and easy to grasp (in the example below, the price of a cup of coffee). Please share as much as you like!

Here's an example of a good analogy, courtesy of Paydayloan42:

"Does he [Widener] realize every time he buys a cup of coffee, the markup is over 500% ... I don't even think my calculator will do the APR on that. i.e. - coffee last about 30 minutes @ 500% markup, APR ???"

Also... don't forget to vote in the polls!!!

-Jonas

By Lawrence Meyers

The recent short-sighted, politically expedient events in Ohio have ironically presented payday lenders with a potential to forever silence its opponents. It is critical, however, that they take the next five months to strategize how best to take advantage of the opportunity handed to them.

First, it’s instructive to review what the de facto banning of payday loans in Ohio offered to Americans interested in truly understanding how credit, politics, and capitalism intersect.

We’ve known for some time that payday loan opponents have received a lot of media support for their ill-conceived crusade. After all, it’s a better story for opponents to trot out an old woman with a walker, who got herself into a “cycle of debt” (often self-admitted), and decry payday loans than it is to show how countless people have been helped by the product.

The opponents have also managed to enlist a great deal of support from newspaper editorial boards. Their authors jump on the bandwagon, either because they 1) were paid to do so, 2) are too blinded by their own ideology, or 3) are just too intellectually lazy to understand the truth about payday loans.

We’ve learned that even law school professors need education about payday loans. We’ve certainly learned the ideologues have no interest in facts, and that they also desperately need to learn basic logic. These misfits would do better to find work in a circus than be given space on an editorial page, especially when they spew racist rhetoric like Thomas Suddes does.

Payday Pundit released the following earlier today regarding the recent legislation in Ohio:

PAYDAY ADVANCE INDUSTRY TO PUT THE QUESTION TO THE VOTERS

In wake of new Ohio law, payday lenders prepare a referendum to bring financial choice back to Ohio

Columbus, OH- Consumers should decide whether to have access to payday advance services, said the Community Financial Services Association of America (CFSA) as it announced a referendum to overturn the recently passed law effectively banning payday advances in Ohio.

"During the debate in the state legislature, consumers were left out of the equation," said D. Lynn DeVault, CFSA President. "We intend to give consumers a voice in the democratic process."

A recent Zogby International survey found 84% of likely voters in Ohio believe citizens should be free to make their own decisions about what kind of credit they can use, and 70% said the government should not be in the business of telling adults they cannot get a payday loan.

"We are confident that the citizens of Ohio will support consumer choice," said DeVault. "And we intend to devote the resources to make sure they understand what is at stake."

The Ohio law, signed by Governor Ted Strickland on Monday, imposes a 28 percent annual rate cap on payday advances. Under this rate cap, the current fee of $15 per $100 advanced would be reduced to less than 10 cents per day. The law takes effect 90 days after it was enacted. In response, many payday advance companies have announced that they will be closing stores in Ohio, putting as many as 6,000 jobs in jeopardy.

Congratulations, Governor Strickland, for outlawing a much-needed industry in your state. I guess it's a victory for Banks and Credit Unions who will take your bill to the bank, continuing to charge HIGHER FEES THAN PAYDAY LENDERS for overdraft "protection," which I'm sure you can't do anything about.

Additionally, I would like to congratulate the "consumer advocacy groups," who have succeeded in ROBBING CONSUMERS OF THEIR FREEDOMS. It's probably safe to take off your sheep skins now that you've accomplished your goal... or maybe you'd like to see how many more consumer rights you can assist in taking away before you expose your true identities.

History shows us that in nations where government power grows and citizen's rights diminish, unregulated underground organizations thrive.

So now you've got a new problem... trying to regulate the unregulatable... because based on fundamental economic principles and the lessons that history has taught us, just because you've sopped up the supply doesn't mean that demand will cease.

But I guess that's what your Banking and Credit Union buddies are counting on... so are you getting a cut of the $17.5 Billion plus that they're making every year off of us? Because, I mean, that would be a logical reason why you ignored your constituents' rights when you signed this bill into law. Not ethical, but certainly logical.

I digress... Here's today's economics lesson...

A high-res version of this image has been attached for printing and distribution.

Many people find traditional bank loans to be out of reach because of circumstances in life that oftentimes cannot be helped. Payday Loans are available to more people, don't require extensive credit checks, and are quick and easy when compared to the hassles involved in obtaining a traditional bank loan.

A high-res version of this is attached for downloading and distribution.

• Sherpa - a member of the Himalayan people living in Nepal and Tibet who are famous for their skill as mountaineers.

Over the past few weeks, I have read some amazing articles that have addressed the paternalism that is running rampant throughout our government. I thought I would share these with those of you interested in understanding the dangers inherent if these practices are allowed to continue.

Remember: This is the United States of America, not Cuba or Venezuela. We celebrate the right to make our own decisions, not take cues from a "benevolent dictator."

Paternalism: A policy or practice of treating or governing people in a fatherly manner, especially by providing for their needs without giving them rights or responsibilities.

Payday Lending: Consumer Choice vs. Over-Regulation
This is an excellent study done by Marc Kilmer which addresses the dangers that consumers face as a result of over-regulation and limitation of choice imposed by legislators.

Batchelder, Hagan Wrong About Payday Loans
Another well-written article by Marc Kilmer which contains some excellent arguments against over-regulation of the Payday Loan industry.

Don't ban payday lending
This is a great op-ed piece which discusses how legislators are embracing paternalism by limiting consumer freedoms.

Payday Loans: The Racist Rhetoric of Thomas Suddes
A well-executed commentary on strategies which are being used by Payday Loan industry opponents to demonize the industry using racist rhetoric which ultimately diminishes people of color who speak out against the Payday Loan industry as mere trophies for their cause.

We noticed over the weekend that we received several hits from Self-Help Credit Union and CRL, two organizations that have waged war on the Payday Loan industry on many occasions. To our new visitors, we would like to extend an invitation to join and take part in the discourse that we host. We aspire to be a fair and balanced forum and will openly criticize the shady elements of our industry in favor of responsible Payday Loan practices. At the same time, though, we challenge any criticisms that are unfounded and impose unfair restrictions on our industry's vitality.

The Payday Loan industry has been demonized over and over again across the nation as a fundamentally predatory industry, targeting financially unstable individuals and trapping them in a cycle of debt. By using poorly supported research in combination with emotionally charged rhetoric to paint the PDL industry in this way, opponents have impacted public opinion in a dramatically, convincing well-meaning individuals that the Payday Loan industry amounts to nothing more than a bunch of shady loan sharks who do business in dark alleys and smoke-filled back rooms.

The truth is that banks and credit unions across the nation want the PDL industry out of the way so that their market share can increase. Why, you ask? Because banks and credit unions charge outrageous "overdraft" fees which will only increase as the PDL industry loses its place in the market.

Who benefits from Payday Lending's loss?
Banks and credit unions wanting to increase the more than $17.5 Billion that they're already making every year from overdraft fees.¹

Here are some examples of those who certainly DON'T benefit from this legislation:

• As a result of pending anti-PDL legislation in Ohio, over 6000 Americans will be unemployed.
• Many small business owners and independent contractors who depend on Payday Lending as a source of capital for their business transactions will be out of options
• Many Americans on fixed incomes will have no source of help when finances become strained²

Overdraft fees will become the ONLY option for these and other individuals who don't have the resources to obtain "traditional" loans, but still have needs and emergencies that must be met.

You decide who profits from the PDL industry's demise.

^{1 [http://www.responsiblelending.org/press/releases/page.jsp?itemID=33323984]}

There are many myths that have become part of our culture. Some of these are propagated by books and TV while others are told around campfires. Since the advent of the Internet, a new forum for the dissemination of tales designed to frighten, intimidate, and bewilder has proven to be a double-edged sword. On the one hand, well-supported facts and information is just a click away, but on the other hand, lies and half-truths have never been spread as fact more rampantly.

Be assured that even though special interests such as Banks and Credit Unions, armed with more political clout than ever before, will spread their sensationalized myths about the Payday Loan industry, we'll be here to give you the facts.

A high-res version of this has been attached for printing and distribution.