Survey of payday lending trends

Today's Fort Worth Star-Telegram takes a look at payday lending across the country and mentions Arkansas AG Dustin McDaniel's recent letter directing the lenders to close their doors. The article mentions that 12 other states (and DC) have enacted interest-rate caps from 20%-30%. As we've seen, however, these lenders have instituted a different system of "fees" for the terms of repayment. Congress also took action against the lenders last year by passing a law that prohibits interest rates above 36% on payday loans to active-duty military families.

In Texas, the Texas Legislature hasn't acted, but several communities have begun their own initiatives to stop predatory lending. The cities of Mesquite and Richardson have adopted zoning laws to keep payday lenders away from residential areas and highway service roads and to prevent clustering, a term used to define customers who borrow from one payday lender to pay off another close by. Fort Worth has more payday lenders, pawnshops and check cashers than banks and credit unions.