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lquadland10 (< 20)

The corruption goes on and on and on and on.

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March 11, 2010 – Comments (3) | RELATED TICKERS: GS

Costly Cash: How a Retiree Wound Up With a 375% Loan By PALLAVI GOGOI

http://www.dailyfinance.com/story/credit/costly-cash-how-a-retiree-wound-up-with-a-375-loan/19378471/?ncid=webmaildl3

Last September, a pressing family matter led 63-year-old Preston White to walk into the Cash Store in Killeen, Texas. The retiree's daughter had just returned from serving in Iraq and had asked for some financial help relocating her family.

White couldn't say no, even though he didn't have the money. It had all gone to pay medical bills for the surgery and treatment of his wife's pancreatic cancer. He had spent all his retirement savings and even the money from selling his home in Virginia.  "We were able to overcome cancer, but it had a real impact on us economically and took away all that we worked for all our lives," says White. Today, his wife, a retired school teacher, is cancer-free and continues to visit her doctor for regular scans. But White wanted to help his daughter settle down. So, he went to the local First National Bank for a $5,000 loan. He was rejected.

That's when he took his 2003 Chevrolet Avalanche pickup (pictured, with White) to the Cash Store near his home and used it as collateral for a one-month "auto-title loan" of $5,000. However, he got only $4,000 in cash, but ended up owing more than $5,000, because of fees and charges that were tacked on. According to the loan document written by the Cash Store, White would owe the lender $5,268.50 at the end of the month. The costs included a fee of $1,200, a lien fee of $28, and finance charges of $40.50. According to disclosures in the document, the cost of White's credit at an annual percentage rate was 375.12%.

The Cash Store manager in Killeen, Veronica (who wouldn't provide her last name), declined to explain the details of White's loan. The chain of 280 stores in about eight states is operated by a private entity called Cottonwood Financial, based in Irving, Texas. A company spokesman, Jared Smith, also declined to answer questions about the loan.

What I saw on the front page of the Finical Times is reporting that Pay day lenders will be excempt form the Consumer Protection laws. Yes this is change we can believe in and the consumer is not protected. I love my vets and yet their family's still get scr   ewed. 

3 Comments – Post Your Own

#1) On March 11, 2010 at 7:06 PM, whereaminow (24.34) wrote:

Why didn't he just go to Prosper.com?  He might have been listed at 40-50% annually. He still would have got a better deal. 

(Note: The SEC, while ignoring Bernie Madoff and the Cash Store, decided that Prosper needed to be shut down because lenders were "profiting" and thus "investing."  And they did this during a supposed liquidity crisis.  I'm just saying.  And yes, I lend on Prosper and I like it.)

David in Qatar

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#2) On March 15, 2010 at 7:41 PM, lquadland10 (< 20) wrote:

I am so proud of you david and thank you.

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#3) On March 17, 2010 at 2:23 PM, Softspoken (< 20) wrote:

We needed health care reform from our government, and they fight over band-aids. We need them to rein in Wall Street for our future economic security, and they are nickel and diming with lobbyists over payday loans and ATM fees. Corruption is no longer news, it's business as usual, which is why every time we ask for rain, we get pissed on.

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