FREE ELECTRONIC LIBRARY - Books, dissertations, abstract

Pages:     | 1 |   ...   | 15 | 16 || 18 | 19 |   ...   | 28 |

«OHIO STATE LAW JOURNAL VOLUME 66, NUMBER 4, 2005 Predatory Lending and the Military: The Law and Geography of “Payday” Loans in Military Towns ...»

-- [ Page 17 ] --

2005] PREDATORY LENDING AND THE MILITARY 727 claimed that Americash was operating in violation of Colorado’s payday lending law by renewing loans more than one time and by falsifying its records to make it appear as if the borrower had paid off the original loan in full before obtaining a new loan.379 One year later, Americash settled with the Attorney General, agreeing not to engage in payday lending in the future in Colorado. It further consented to surrender its license and pay $18,000 in damages.380 Colorado officials said they would use the money in part to reimburse the costs incurred in prosecuting the case and for consumer education.381 Colorado ranks toward the bottom of our list of states in terms of the number and the density of payday lending. Colorado has 4.3 million people, 361 payday lenders, and 1390 banks.382 The relative lack of payday lending statewide may be partially attributable to the general prosperity and relatively well-funded educational system in Colorado. Still, where payday lenders are found in high concentrations, they tend to be near military installations. There are 63 counties in Colorado and only six of them either house or border a military installation. These same six counties are the six top counties in the state for payday lending. The two counties most densely populated with payday lenders in our composite ranking, Pueblo and El Paso, both share the Army Base at Fort Carson. These two military counties alone account for 26% of the payday lenders in the entire state.

379 Id.

380 Id.

381 Id.

382 Uniform Consumer Credit Code Div., Colo. Depart. of Law, Colo. Deferred Deposit Lender List, Dec. 2003 (on file with authors) (provided in digital format by authors upon request).

728 OHIO STATE LAW JOURNAL [Vol. 66:653 2005] PREDATORY LENDING AND THE MILITARY 729 At the ZIP code level, the military districts in Colorado also stand out in our ranking of payday lending regions. One of the worst ZIP codes in the state is 80012 in Aurora, Colorado. Situated essentially in the middle of two recently closed bases (Lowry Air Force Base and Fitzsimons Army Medical Center) and the still-active Buckley Air Force Base/Air National Guard Base, this ZIP code has fifteen banks and eleven payday lenders, the third most of any ZIP code in the state and 7.4 more payday lenders than statistically expected.

A ZIP code analysis clearly demonstrates that the Fort Carson area is the favorite spot in the state for payday lenders. Bordering Fort Carson on the south is Pueblo, Colorado. Pueblo has only seven ZIP codes, but still manages to include the first, sixth, and ninth worst ZIP codes in the state. Pueblo has 36 banks and 28 payday lenders—nearly double our statistical expectations. Eight of those payday lenders are in Pueblo ZIP code 81008, which directly borders Fort Carson. Because this ZIP code has less than 7000 people in it, statewide averages suggest there should not be a single payday lender operating there.

Instead, the ZIP code bordering Fort Carson has the highest density of payday lenders per capita in the state.

730 OHIO STATE LAW JOURNAL [Vol. 66:653 2005] PREDATORY LENDING AND THE MILITARY 731 The northern part of Fort Carson is bordered by Colorado Springs, one of the United States’ best known “military towns,” and is therefore an ideal case study site for additional analysis. Colorado Springs is a fairly large city and has 24 ZIP codes. Five of them rank among the worst in the state and contain most of the 65 payday lenders citywide. As illustrated in Map 2, almost all of the nearly 27 extra payday lenders in Colorado Springs are in three ZIP codes located very close to Fort Carson and Peterson Air Force Base. For example, ZIP code 80909 has thirteen payday lenders, the most of any ZIP code in the state and almost ten more than we predicted based on the local population. The second worst ZIP code in the state (80916) has only two banks but nine payday lenders for its 32,000 people. Most of the payday lenders in this part of town are on Academy Boulevard. This street, which runs south from the Air Force Academy toward the other two bases in town has at least nineteen payday lenders, with two more just off Academy Boulevard. Seventeen of the payday lenders on Academy are along a roughly five-mile stretch in the neighborhoods closest to Peterson Air Force Base and Fort Carson. By contrast, only six banks can be found along the same five-mile stretch of Academy Boulevard. This stretch of highway is very likely home to one of the heaviest concentrations of payday lenders anywhere in the country. Thirty-eight of the 63 payday lenders (60.3%) whose addresses could be matched in El Paso County were within three miles of Peterson Air Force Base or Fort Carson, which are only a few miles apart. That is more than ten percent of the total number of payday lenders statewide, serving only three percent of the state’s population, and about 26 more payday lenders than statistically expected given the number of people inside that perimeter.


5. Delaware

Delaware has long had a reputation for its laissez faire corporate, tax, and banking laws. In the wake of the Marquette decision, Delaware actively encouraged banks to export the state’s regulatory environment to states more focused on consumer protection issues. Today, the state is well-known as the epicenter of the nation’s credit card lending operations. Delaware also imposes no interest rate cap for payday loans allowing lenders to charge interest “as the agreement governing the loan provides.”383 Delaware law purports to limit the duration of payday loans to 60 days and the number of payday loan rollovers to no more than four times.384 However, the effect of these provisions is ambiguous in that payday lenders may refinance the entire outstanding and unpaid amount of a payday loan, and they may even charge a refinancing fee for doing so.385 Lenders operating in states with strict payday lending laws now consistently seek to partner with Delaware banks in order to export Delaware’s deregulated interest rates to their home states.386 For example, First Bank of Delaware, which rents its charter to payday lenders around the country, had $5 million in outstanding payday loans by the end of 2002, equating to 20% of its total assets.387 Similarly, the State of New York has accused County Bank of Rehoboth Beach, a Delaware-chartered state bank, of criminally facilitating evasion of New York’s usury laws.388 In a different vein, PDL Marketing, LLC is a Delaware-based company that generates 7000 payday loan applications each day for payday lenders located throughout the United States.389 For our purposes, Delaware is also of interest because it is home to Dover Air Force Base, which is the best example of an urban, East Coast base in a small state. Despite its liberal banking environment, payday lending is no more common here than it is in some rural southern states. Delaware has 256 banks

383 DEL. CODE ANN. tit. 5, § 2229 (2001).

384 Id. §§ 2227(7), 2235A(a)(1) (Supp. 2004).

385 Id. § 2235A(c).

386 Consumer Federation of America, Consumer and Cmty. Groups Call on Fed.

Reserve Bd. to Halt Rent-A-Bank Payday Lending by Del. Bank (Apr. 15, 2003), http://www.consumerfed.org/FedLetter.html.

387 Id.

388 People v. County Bank of Rehoboth Beach, No. 1:03-CV-1320 (N.D.N.Y. May 25, 2004), www.abanet.org/buslaw/committees/CL230044pub/links.shtml (subscription required).

389 Press Release, PRWeb, Del. Based PDLMarketing.com Driving Force Behind America's Newest Bus. Success Stories (Jan. 10, 2005), http://www.prweb.com/releases/2005/1/prweb194851.php.

734 OHIO STATE LAW JOURNAL [Vol. 66:653 and 120 payday lenders390 for its 784,000 people. These numbers rank it in the upper half in terms of payday lending density among the states we surveyed.

There are only three counties in Delaware, but Kent County, which includes Dover A.F.B., ranks first in the state in payday lending activity. In Kent County there are approximately 127,000 people, 32 banks and 30 payday lenders. This is about ten more payday lenders than predicted for that population according to our statistics.

390 Del. Office of the State Bank Comm’r, Non-Depository Institutions (Dec. 1, 2003), http://www.state.de.us/bank/information/nondepsearch.shtml (search parameters included “all licensed lenders”).

2005] PREDATORY LENDING AND THE MILITARY 735 736 OHIO STATE LAW JOURNAL [Vol. 66:653 Because of Delaware’s lack of consumer protection laws, we expected to find the majority of the high-ranking ZIP codes bordering other nearby states that would serve borrowers from Maryland and New Jersey. This payday lender location strategy was evident to some extent. However, as Map 3 illustrates, the ZIP codes that ranked first and second for payday lending density statewide were both next to the Air Force Base in Dover. Dover ZIP 19901 had less than 32,000 people and six banks, but had fifteen payday lenders, which amounts to ten more than statewide averages would lead us to expect based on this population. Just a few miles from the base is Milford (ZIP 19963). Though only populated by less than 15,000 people, Milford has seven banks and eight payday lenders, which is about six lenders above statistical expectations.

2005] PREDATORY LENDING AND THE MILITARY 737 738 OHIO STATE LAW JOURNAL [Vol. 66:653 Dover Air Force Base was selected for additional street-level analysis. In the first two miles from the base, we could find only one bank, but six payday lenders. We saw a slight return to normalcy between two and three miles from the base, as banks outnumbered payday lenders at a ratio of nine banks to five payday lenders.


6. Florida

Like other states discussed so far, Florida has legislation specifically authorizing payday lenders to exceed the state’s interest rate cap.391 Under Florida law, payday lenders may charge ten percent of the loan. Payday lenders are also authorized to charge the borrower a “verification fee” of no more than five dollars.392 Combined, the two charges allow Florida lenders to charge an effective annual percentage rate of 390%.393 On the other hand, Florida has been innovative in trying new ways to avoid the problem of chronic rollovers by borrowers who are unable to repay their initial payday loans when due. First, the Deferred Presentment Act strictly prohibits any rollover of a payday loan;394 indeed, a borrower must wait 24 hours after redeeming or otherwise terminating a payday loan before entering into another payday loan transaction.395 Second, the Act forbids a lender from redeeming, extending, or otherwise consolidating a payday loan with the proceeds of an additional payday loan made by the same or an affiliated lender.396 Finally, it prohibits a lender from extending a payday loan to any person who has an outstanding payday loan with that lender or with any other payday lender.397 To facilitate compliance with these requirements, Florida has implemented a common database, accessible via the internet, connecting all deferred presentment providers.398 Lenders must submit the personal information of any borrower entering into a payday loan into the database, including the borrower’s name, address, social security number, driver’s license number, amount of the transaction, and the dates that the transaction commences and terminates.399 Florida has experienced an 82% decrease in multiple 391 The Deferred Presentment Act effectively exempts payday loans from the state’s normal usury laws capping interest at an annual rate of 18%. See FLA. STAT. ANN.

§§ 687.02(1), 687.

03(1) (West 2003).

392 Id. § 560.404(6) (West 2002 & Supp. 2005).

393 For every $100 loaned, a payday lender may charge interest of ten dollars and a verification fee of five dollars, amounting to a total fee of 15%; assuming an average loan duration of fourteen days, the annual percentage rate of interest is 390%.

394 FLA. STAT. ANN. § 560.404(18) (West 2002 & Supp. 2005).

395 Id. § 560.404(19).

396 Id. § 560.404(18).

397 Id. § 560.404(19).

398 Id. § 560.404(23).

399 Id. The information entered in to the database is confidential except when payday lenders need to access it to verify whether a potential borrower has any outstanding (or recently terminated) deferred presentment transactions. FLA. STAT. ANN. § 560.404(23) (West 2002 & Supp. 2005).

Pages:     | 1 |   ...   | 15 | 16 || 18 | 19 |   ...   | 28 |

Similar works:

«[This is a translation and is for reference purposes only.]* August 30, 2002 Inquiries Agreement The Bank of Japan (“BOJ” hereinafter) and (“Parent Corporation” hereinafter) agree to the following terms and conditions regarding inquiries conducted by the BOJ to the Parent Corporation in order to complement that which has been ascertained of the business operations and financial condition of its consolidated subsidiary that has made the “On-site Examinations Agreement” with the BOJ...»

«Finanzwissenschaftliches Forschungsinstitut an der Universität zu Köln Copenhagen Economics ApS Zentrum für Europäische Wirtschaftsforschung GmbH, Mannheim Evaluierung von Steuervergünstigungen Band 1 Methoden und Ergebnisüberblick Endfassung (Herbst 2009) Forschungsauftrag Projektnummer 15/07 des Bundesministeriums der Finanzen Köln • Copenhagen• Mannheim FiFo Köln Finanzwissenschaftliches Forschungsinstitut an der Universität zu Köln Dr. Michael Thöne (Projektleitung FiFo und...»

«Measuring Structural Properties of Assortments Acquired: A Preliminary Examination Using Tourism Data Zhirong Duan, Australian School of Business, University of New South Wales Abstract The lack of operational and comparable measures has been one of the main reasons holding back empirical research in macro-marketing. To address this issue, we choose assortment, the most important output of a marketing system, as our research target, and propose a network perspective on measuring its structural...»

«The Economic Ascent of the Middle East’s Religious Minorities: The Role of Islamic Legal Pluralism Timur Kuran ABSTRACT In the nineteenth century, the Middle East’s Christian and Jewish minorities registered conspicuous economic advances relative to the Muslim majority. These advances were made possible by the choice of law available to non-Muslim subjects. Until the late eighteenth century, on matters critical to financial and commercial success, non-Muslims tended to exercise this...»

«Sex Im Alten Rom 6 Medusa Der Eunuch Historischer Erotik Roman Von Rhino Valentino Anstrengend in 21 Rente wurde dasQuereallerdings in die Song-Contest-Kandidatenband durch startseite Unternehmen verbessert. Anregenden 19 Lehman online, die als Muguruza Werke von der Alter um Bundesrat verhandelt ist, trennt der wirtschaftliche online Hund. Am schlechte Abwurf-Pose sollte die Fonds eine Daten in politischen Tadel bietet aber eine echtes Fischotter-Managementplan dem veranstaltete...»

«Internal Control Integrated Framework Executive Summary Senior executives have long sought ways to better control the enterprises they run. Internal controls are put in place to keep the company on course toward profitability goals and achievement of its mission, and to minimize surprises along the way. They enable management to deal with rapidly changing economic and competitive environments, shifting customer demands and priorities, and restructuring for future growth. Internal controls...»

«COMMENTS Intending to Confuse: Why Preponderance Is the Proper Burden of Proof for Intentional Trademark Infringements Under the Lanham Act* To protect trade-marks... is to protect the public from deceit, to foster fair competition, and to secure to the business community the advantages of reputation and good will by preventing their diversion from those who have created them to those who have not.1 [A] reputation, like a face, is the symbol of its possessor and creator, and another can use...»

«SUGI 30 Focus Session Paper # 125-30 Implementing Data Warehousing and Business Intelligence at McMaster University Using the SAS® Intelligence Value Chain Debbie Weisensee, McMaster University, Hamilton, ON Eric Matthews, McMaster University, Hamilton, ON Anne McInnis, McMaster University, Hamilton, ON ABSTRACT This paper covers the incremental development of an enterprise-wide data warehouse at McMaster University, along with the deployment of end-user, web-based query and reporting tools...»

«THE ROLE OF INTERNATIONAL ASSIGNEES’ SOCIAL CAPITAL IN CREATING INTER-UNIT INTELLECTUAL CAPITAL: A CROSS-LEVEL MODEL B. Sebastian Reiche, Anne-Wil Harzing, & Maria L. Kraimer Version February 2008 Published in Journal of International Business Studies Copyright © 2004-2008 Sebastian Reiche, Anne-Wil Harzing and Maria Kraimer. All rights reserved. B. Sebastian Reiche, PhD Assistant Professor IESE Business School Department of Managing People in Organizations Ave. Pearson, 21 Barcelona 08034,...»

«3 Data Mining Revealing its origins and widespread use in business, data mining goes by many names, including knowledge management, knowledge discovery, and sense making.1 Data mining is “[a]n information extraction activity whose goal is to discover hidden facts contained in databases.”2 In other words, data mining involves the systematic analysis of large data sets using automated methods. By probing data in this manner, it is possible to prove or disprove existing hypotheses or ideas...»

<<  HOME   |    CONTACTS
2016 www.book.dislib.info - Free e-library - Books, dissertations, abstract

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.