Thursday, December 14, 2017
Business

Could payday loans be outlawed? Amscot isn't taking any chances

Friday was the cutoff for the public to weigh in on the payday lending industry before federal regulators choose what terms companies can — and can not — offer to millions of low income borrowers around the country.

The issue is of vital interest to Florida's largest payday lender, Tampa-based Amscot. The firm has warned that the federal regulations, as currently proposed, would put it out of business. Privately held Amscot employs about 1,850 people and has annual revenues of more than $200 million.

Over the last few months, the company has asked its customers to contribute to the public comments, listing their name and address, which Amscot mailed to Washington, D.C.. About 560,000 Amscot customers did so, the company said. The majority of the customers chose to sign one of five pre-printed forms prepared by Amscot. One of the letters read in part: "Without this provider in my community, I know my family will suffer."

Industry representatives estimated that about 1.5 million comments have been submitted to the U.S. Consumer Financial Protection Bureau, which is responsible for implementing the new regulations.

"This rule-making has generated enormous interest," said Alex Horowitz, a senior officer for The Pew Charitable Trusts small-dollar loans project. "It demonstrates this is a high-stakes rule-making ... This could save low-income households more than $10 billion a year."

Horowitz and Amscot expect the CFPB to take roughly a year before the new regulations are imposed.

Previous coverage: Are payday lenders like Tampa-based Amscot a necessary part of the banking industry?

Payday loans are marketed to nearly half of Americans who do not have the cash to cover an unexpected $400 bill.

Amscot this week invited a Tampa Bay Times reporter to look over 102,458 handwritten customer comments, which were split into piles thousands of pages high.

"I am on disability and unfortunately my once a month check does not cover my monthly expenses. I actually rely on the cash advance in order to survive," one Tampa customer wrote. The company asked the Times not to publish the names or addresses of those who wrote the comments. The Times compared a handful of names to public records data and found matches.

"If you changed the cash advance program you will put more stress on familys (sic) that work from paycheck to paycheck," a St. Petersburg customer wrote.

The CFPB in June proposed new regulations to "end payday debt traps" by putting caps on the number and amount of loans that companies would be allowed to provide to customers.

Payday loan opponents want to get rid of triple digit interest rates and other practices they say victimize the poor.

But even opponents acknowledge that the working poor have few existing options outside the payday loan industry. The Pew Charitable Trust has encouraged the CFPB to pass regulations that would make it easier for banks and credit unions to offer small dollar loans at a lower cost to consumers.

The Florida Office of Financial Regulation sets a maximum fee of $10 per $100 borrowed over 31 days. The loans also carry a one-time verification fee of up to $5. Amscot's total fee is $11 per $100. Florida also imposes a $500 cap on loans and limits borrowers to one at a time.

In order to qualify for the loans, customers must have proof of income and a checking account.

Amscot said the letters will be used in a lawsuit against the CFPB if the final regulations threaten the business.

Comments to the CFPB can be submitted at regulations.gov.

Times senior researcher John Martin contributed to this report. Contact Alli Knothe at [email protected] Follow @KnotheA.

Comments
Be ready for busy roads and airports: 5.6 million Floridians to travel for the holidays

Be ready for busy roads and airports: 5.6 million Floridians to travel for the holidays

A record-breaking number of Americans are expected to travel during the holiday season next week, according to a AAA report released Thursday.The travel company projects 107.3 million Americans will pack their bags and leave their homes between Dec. ...
Updated: 2 hours ago
Here’s who’ll benefit, and who might not, if net neutrality is repealed as expected

Here’s who’ll benefit, and who might not, if net neutrality is repealed as expected

WASHINGTON — The Federal Communications Commission is expected to repeal net neutrality rules Thursday, a move that will likely have major implications for internet service providers, startups and consumers.The hotly contested move centers on a set o...
Updated: 2 hours ago
Tampa chamber of commerce evolves to take on more policy challenges

Tampa chamber of commerce evolves to take on more policy challenges

TAMPA — A couple of the ways the Greater Tampa Chamber of Commerce has changed — evolved, really — will be on view today at the organization’s 132nd annual meeting at the Tampa Convention Center.But first, recall what the chamber used to be."A coffee...
Updated: 2 hours ago
Disney buying large part of 21st Century Fox in $52.4 billion deal

Disney buying large part of 21st Century Fox in $52.4 billion deal

NEW YORK — Disney is buying a large part of the Murdoch family’s 21st Century Fox for about $52.4 billion in stock, including film and television studios and cable and international TV businesses, as it tries to meet competition from technology compa...
Updated: 3 hours ago
Exploring the incredible color, cuisine, culture of India

Exploring the incredible color, cuisine, culture of India

DELHIAs I slid my shoes off and handed the man a five-rupee note before entering the Jama Masjid mosque, I could feel the heat from the red stone against my heels. I could also feel the intense stares of the Delhi locals. I don’t know which made me s...
Published: 12/14/17
Florida hospitals call for more funding in effort to address looming doctor shortage

Florida hospitals call for more funding in effort to address looming doctor shortage

The number of doctors practicing in Florida has not kept up with the state’s surging population growth, and more money is needed to recruit and keep them here, hospital leaders said Wednesday.The shortage is particularly acute in four speciality area...
Published: 12/13/17
Allegiant Air mechanics ask to be represented by Teamsters

Allegiant Air mechanics ask to be represented by Teamsters

Allegiant Air mechanics filed with the federal government Wednesday to be represented by the International Brotherhood of Teamsters. If the petition is passed, the union would negotiate on behalf of the mechanics and related technicians on issues suc...
Published: 12/13/17
Federal Reserve boosts key interest rate for third time this year

Federal Reserve boosts key interest rate for third time this year

WASHINGTON — The Federal Reserve is raising its benchmark interest rate for the third time this year, signaling its confidence that the U.S. economy remains on solid footing 8˝ years after the end of the Great Recession. The Fed is lifting its short-...
Published: 12/13/17
Pasco Business Digest for Dec. 15

Pasco Business Digest for Dec. 15

Business digestWho’s newsHOSPITAL APPOINTS ASSISTANT CHIEF NURSING OFFICER: Registered nurse Courtney Stephenson, board certified nurse executive advanced, was recently appointed assistant chief nursing officer at Medical Center of Trinity. Stephenso...
Published: 12/13/17

Hernando Vendors for Dec. 15

Vendors are needed for the following nonprofit events:• Vendors and volunteers are being sought for a National Homeless Persons’ Memorial Day event from 8 a.m. to 3 p.m. Dec. 21 at Crescent Community Clinic, 5244 Commercial Way, Spring Hill. During t...
Published: 12/13/17