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- Subscribe - Contact Us - Rate Card - Place an Ad Archives Revels Classifieds Real Estate Local Scene Wedding Weather Subscribe Contact Us April 14, 2006 For some, payday loans are only way Though lenders face increased opposition, business keeps booming By Alan Panebaker Ashland Daily Tidings Cliff Voss strolled down to the Advance America payday loan center in Ashland to find the office mysteriously closed and a drive to Medford in front of him. Short on cash and coming up on truck payments, Voss needed money. With no family or friends to loan it, his only option was the payday loan — a short-term loan where a person leverages his paycheck to receive an advance of money to be paid back within a decided amount of time. “They’re your last resort to save your ass if you’re a working-class schmo like myself,” Voss said. “My family and my friends don’t have any money to lend, and I’m not the type of person to ask my boss for it. If you’re a person on your own, you’ve gotta do what you’ve gotta do.” Voss is a line cook at the Breadboard restaurant in Ashland and just got back from a vacation with his girlfriend. Not getting a payday loan would probably mean more debt because of late insurance and car payments. This was not Voss’ first rodeo with the payday loan service, a business facing a growing battle for payday-loan reform in the Oregon Legislature. Regardless, he sees it as a service that is sometimes necessary. He said he has received about 10 payday loans in his life and, despite the astronomical fees, he has always paid them back. So Voss borrowed $450 that he will hopefully pay off in two weeks. If he can, he’ll escape with just an $81 fee for the one-time loan. However, Voss has the opportunity to postpone his loan pay back three times (every two weeks) and just pay the fee during every rollover. If he could not unite funds to pay the entire $450 at the end of the six-week period, Voss would “go bad” as the agency calls it, and his loan would start to accrue annual interest at a rate of 730 percent. The average APR for an Advance America loan is between 400 and 500 percent, but because of Voss’s credit rating, he would have to pay more if he “goes bad.” “There’s a little suffering involved in it,” Voss said. “But I think Advance America is really there to help you out even if the fee is a little steep for someone in a tight situation.” Merry-go-round Linda Cade, a councilor for Consumer Credit Council Service of Southern Oregon in Medford, said that she deals with all sorts of debt and credit type situations, and people in debt because of payday loans are of the most helpless. The main problem, Cade said, is that people who take out these loans do not have a home to leverage, so when they get into debt, there is nothing to fall back on. “When people get into the payday loan merry-go-round, it’s not just one loan. It’s always at least three or four,” Cade said. The problem she sees is people with limited resources borrowing a bit of money then getting further and further behind when they cannot catch up with a financial shortfall. “People who live paycheck to paycheck have very limited resources to deal with the bump,” Cade said. Patty Wentz, a spokeswoman for Our Oregon, a nonprofit group that is pushing for a Payday Loan Reform Act, said that while payday loans may seem like the last resort for people like Voss, there may be other options like joining the Rogue Federal Credit Union, which offers payday loans for members at lower rates. “Seven out of 10 people who apply for these loans can’t afford to pay them back,” Wentz said Monday. The reform act that Wentz and other groups are pushing for would set a cap on the interest rates companies can charge for overdue payday loans, establish a 10 percent origination fee and give people 31 days to pay back their loans. Initiative No. 135 (the Payday Loan Reform Act) died in the 2005 legislative session. The issue will most likely be discussed in a special legislative session April 20. People like Wentz are skeptical of Speaker of the House Karen Minnis’ recent support of the payday reform bill because of alleged campaign contributions from the industry. Wentz’ organization is looking for the toughest possible restrictions on lenders, and she said the bill may offer them more leeway. “Payday loan reform should be as good or better than the ballot measure,” Wentz said. Charles Deister, a spokesman for Minnis, said she is looking for agreement from the Legislature rather than fewer restrictions on lenders. “If she can’t find agreement in votes for [payday loan reform], she’ll support the ballot measure,” Deister said. Meanwhile, in an article in The Oregonian newspaper on Monday, Wentz said, “I don’t know that she has changed her position. Her position has been consistently to protect the industry.” While payday loan reform is waiting to be dealt with at the state level, Portland, Gresham and Troutdale have all passed payday loan ordinances. According to the city recorder, Ashland has no such ordinance. In Ashland, Advance America closed down, and employees at the Medford branches were not at liberty to say for what reason. Despite what happens in the Legislature, though, the issue for guys like Voss and Ronnie Burgess — who took out a payday loan a few years ago in Baton Rouge, La. — the need for money at the moment trumps the worry about exorbitant fees and interest rates. Burgess borrowed $100 off his checking account from Cash Advance — a national payday loan chain — and ended up paying back $170. Burgess, now an Ashland resident, said, “I’d never do it again. It was just one of those times when you really needed it.” When a person needs money, he needs it, though, and Voss was thankful to get it. As Voss took his check and paid his bills Monday, he said, “I feel pretty good about it in general. It’s nice to know I can go somewhere and get help when I need it.” DailyTidings.com Home Page Archives | Revels | Classifieds | Real Estate Guide | Weather | Subscribe | Contact Us Copyright 2005 Ashland Daily Tidings and Ottaway Newspapers All Rights Reserved Deep Muscle Stimulator Ceramic Piggy Banks FREE Entertainment Guide Women's & Men's Slippers Accelerate Weightloss Products Backpacks Merchant Account Vegas Travel Guide Search Engine Optimization Student Loans Hotel & Airline Reservations Hammocks Water Filter Helzberg Diamonds Online Casinos Community Bonus Casino Mortgage Calculator Security Systems Mailing Lists Click Here Advertisement .:Advertisements:. Site Search: RESOURCES - Mail Tribune News - ODOT Road Cams