MBA 615

Payday Loans

Executive Summary Payday loans are short-terms, high-interest loans where people go to a physical loan store or via online store that are not banks. They are designed for people who need a quick injection of money before their next paycheck and its purpose is fast, easy money to take care of unexpected bills or emergencies (Watson, Stephanie., 2014). They started around 1959 when the senate passed a bill allowing people to received small amount of money for short-term loans for emergency, such as bankruptcies, bad credit, etc… The bill was to help people who couldn`t receive a regular loan at a normal interest rate. Since then, Payday loans have become very popular and in 1996, Payday lending saw a huge boom when the senate legalized them. In the mid-2000, online lending became available and is now a huge piece of the market (PaydayLoanPay.com., 2011-2014).

Recently many controversy have been discussed with the Payday lending industry because of many operating dishonestly and illegally. This huge issue has caused the department of justice to investigate and place restrictions causing many legal and honest operating Payday lending to close shops and employees losing their jobs (Okun, Sarah.). In the meantime, the honest and top Payday lenders have form the Online Lending Alliance (OLA) to defend them and make sure Payday Loans don`t get de-legalized because of cracks in the lending system (Jones, Liz., 2014, March 26).

Payday loans serves a great purpose to many who are in financial strains with poor credits even with their expensive fees and higher interest rates. The DOJ should find and prosecute the illegal and dishonest lender stores and regulate the industry in a way that reflects fair business practices, instead of placing too many restrictions or trying to de-legalizing the industry.

What is a Payday Loan A Payday loan is a loan that you get from a business that is not a bank, usually a loan store. It is called a Payday Loan because you generally borrow just enough to get through your next paycheck, which is when the money is due (Caldwell, Miriam., 2013). They are designed for people who need a quick injection of money before their next paycheck. The purpose of a payday loan is fast, easy money to take care of life`s little emergencies (Watson, Stephanie., 2014).

Payday Loans operate under a wide variety of titles, and they may take postdated checks as collateral. You can apply for it in person by visiting a store or via online. Most loans can be anywhere from $50 to $1000 and they charge a large fee for the loan, which puts the interest rate very high, some rates are as high as four hundred percent. Payday loan businesses cause customers to become reliant on them because they charge large fees, and expect quick repayment of the money. This can make it difficult for a borrower to pay off the loan and still be able to meet monthly expenses. Many borrowers have loans at several different payday loan businesses, which worsens the situation (Caldwell, Miriam., 2013). In short, Payday loans are short-terms, high-interest loans (Watson, Stephanie., 2014).

History of Payday Lending No one can say when actually payday loans became popular in the USA but their first official mentioning was in 1959. In that year the Senate passed the bill according to which people were permitted to receive small sums of money as short-term loans in urgent situations. The bill was to help all those people who, because of different reasons, could not apply for regular loans. Those reasons included bankruptcy, bad credit and such. During those days, those loans were called check cashing loans and people could get them in person only (transactions via the Internet became popular much later) (PaydayLoanPay.com., 2011-2014).

The industry was originally prohibited by traditional state-based anti-usury legislation, but gained exemptions from those laws throughout the 1990s and early 2000s until it reached the stage where it was authorized in 35 American states (Online Payday Loans., 2014). Payday lending is now legal and regulated in 37 states. In 13 states it is either illegal or not feasible, given state law (Wikipedia., 2014). Even in states where it is not officially authorized, the American industry has exhibited great ingenuity in evading regulation designed to work against it. Indeed, it is a feature of the payday lending industry that it frequently adopts innovative approaches to avoid unfavorable legislation in every jurisdiction in which it is threatened and generally succeeds in continuing to operate under all but the most prohibitive regulation (Online Payday Loans., 2014). As for federal regulation, the Dodd–Frank Wall Street Reform and Consumer Protection Act gave the Consumer Financial Protection Bureau specific authority to regulate all payday lenders, regardless of size.

Payday lending enjoyed great popularity in the 90s. To be more precise, it happened in July 1996 when the Senate legalized them (PaydayLoanPay.com., 2011-2014). The high-cost short term lending industry in United States has grown explosively since 2002.

In the early 1990s, there were less than 200 payday lending stores across America. By 2007, there were 25,000. To give a sense of perspective, this has been described as: “more payday loan establishments than there are McDonald’s and Starbucks locations combined”. In 2000, $10 billion was loaned in payday loans across America, a figure which grew to $25 billion by 2003 and again to more than $28 billion by 2006 with payday lenders thought to issue loans to approximately 15 million American households every year. In terms of loan revenue, it is estimated payday lenders generate approximately $5.5 billion annually in loan fees. This estimate does not include the online industry, which is comparatively small, but growing, with loan volume in 2008 estimated to be approximately $7.1 billion (Online Payday Loans., 2014).

The growth of payday lending has led to fierce policy debates across many American jurisdictions. Consumer advocates increasingly characterize payday lending as a predatory lending model that causes debt spirals and harms low-income consumers. The industry, on the other hand, expends considerable resources lobbying for further deregulation and opposing legislative attempts to curb growth (Online Payday Loans., 2014).

How Payday loan works
The basic loan process involves a lender providing a short-term unsecured loan to be repaid at the borrower's next payday. Typically, some verification of employment or income is involved (via pay stubs and bank statements), although several payday lenders do not verify income or run credit checks. Individual companies and franchises have their own underwriting criteria.

Physical stores
In the traditional retail model, borrowers visit a payday lending store and secure a small cash loan, with payment due in full at the borrower's next paycheck. The borrower writes a postdated check to the lender in the full amount of the loan plus the fees. On the maturity date, the borrower is expected to return to the store to repay the loan in person. If the borrower does not repay the loan in person, the lender may redeem the check. If the account is short on funds to cover the check, the borrower may now face a bounced check fee from their bank in addition to the costs of the loan, and the loan may incur additional fees or an increased interest rate (or both) as a result of the failure to pay (Wikipedia., 2014). Online stores
In the more recent innovation of online payday loans, consumers complete the loan application online (or in some instances via fax, especially where documentation is required). The loan is then transferred by direct deposit to the borrower's account, and the loan repayment and/or the finance charge is electronically withdrawn on the borrower's next payday (Wikipedia., 2014). For example, your car broke down and you decide to borrow $300 for the repairs from a payday loan. You'll write a post-dated check for $340 (the amount plus a finance fee) made payable to the lender. The lender then advances you $300 for a set period, usually 14 days. When that period is up, you pay the lender $340 in cash, let them deposit the post-dated check or write another post-dated check for the amount with an additional finance fee. If you don`t pay the debt in full at the end of the term, you will be charged additional fees and finance charges (Watson, Stephanie., 2014).

Types of Payday Loans:
One Hour Payday Loan
The one hour payday loan has been made a dream come true with the advent of the online payday lenders who have made it easier to apply for such loans over a very short period of time. You can actually get a loan within the span of one hour. All you have to do is fill in an online form and then make sure that the details submitted by you are correct. Once the company has verified your details, you will receive the money in your bank account (Shree, Apurve., 2013).

Instant Online Payday Loan
The instant online payday loan is a very fortunate thing for those who needed money. It should not be made into a regular affair as it will only lead to a depletion of your savings. However, having said that, the no fax payday loans have made the instant online payday loan possible as well. So if you are going through a financial crisis, you need not wait for the bank to approve your loan to work out your problematic matter. You need not worry about your credit history and score and can go ahead and apply for a payday loan. Moreover, the no faxing option makes the entire payday loan process is a lot less tiresome (Shree, Apurve., 2013).

Cash Advance
The cash advance in your bank will be liable to be paid back with your next salary check. These loans are an expensive affair and you might find yourself paying back much more than you are able to afford. Therefore, it is really important that you read the fine print before committing to taking the loan. Most lenders who offer lower rates of interest often camouflage their costs as processing fee. Those with lower processing fee will have a higher rate of interest. More or less the rates come up to the same (Shree, Apurve., 2013).

Pros and Cons: Pros
Convenient
Requirements to qualify for a payday loan is a steady income, a state-issued ID and a checking account. When you walk into a payday loan store, the chances are high that you'll walk out with some cash to pay your bills in less than an hour (Chadwick, Danny., 2012).

Quick and Easy
The payday loan paperwork is usually easy and quick. Most times, the loan process takes less than a half hour, and the money will be deposited into your bank account within one day (NJ Highland Council).

Available to people with poor credit
Often, the reason many people turn to payday loans is because they cannot qualify for a conventional loan because of poor credit. Seldom, Payday loan services check their customers` credit scores (Chadwick, Danny., 2012).

Most are professional, upstanding institutions
This industry has grown substantially in the last two decades. Payday loan institutions have matured from small operations to large chain and franchise establishments. A natural consequence of this is that management and the market have cultivated stores that look and feel like regular banks. Also, employees who run these stores are professional and courteous, and they treat their customers with the respect they deserve (Chadwick, Danny., 2012).

Cons
Payday loans can only offer small amounts ($100-$1000)

Expensive
The cost of the money borrowed from a payday lender would be prohibitively expensive if these loans had the same repayment terms as their conventional counterparts. The annual percentage rate of interest on a payday loan ranges from roughly 200% to 675% (Chadwick, Danny., 2012).

Not a long-term financial solution
If you're looking to get a payday loan, chances are your financial situation isn't good. While getting an influx of cash may help with your problems short term, it cannot fix the underlying problems that led you to a situation in which you needed such a loan in the first place (Chadwick, Danny., 2012).

Terms and Conditions
The terms of payday loans are seldom made clear to those who are so desperate for quick money. Not reading the terms and conditions carefully can mean thousands more in fees (NJ Highland Council).

Dishonest
Unfortunately, some Payday loans behave like loan sharks rather than legitimate businesspeople. A good rule to follow is that if you ever feel uncomfortable borrowing money from a payday lender, don't do it. There are hundreds of other scrupulous lenders who will gladly take your business without ripping you off (Chadwick, Danny., 2012).

Online Lenders Alliance (OLA) Since 2005, OLA has worked on behalf of the online lending industry, representing top online businesses. The Online Lenders Alliance is an organization representing the growing industry of U.S. based companies offering online consumer short-term loans, also known as Payday Loans.

To protect the industry against potential damage caused by inept lenders, the leaders formed OLA in 2005. The first step was to standardize the principles by which loans should be made. All member companies have agreed to a List of Best Practices and Code of Conduct developed by OLA to ensure that consumers are fully informed and fairly treated and are using all lending products and practices responsibly. Despite the thousands of positive stories relayed to short-term lenders by subprime customers, there remain a large number of misconceptions and myths surrounding the online lending industry. One of our tasks as a professional organization is to dispel these myths, clear up the misconceptions, and educate the public, legislators and regulators about the demand and need for consumer short-term loans on the Internet (Jones, Liz., 2014).

OLA has the authority to speak on behalf of the online lending industry to the public, opinion leaders and government officials. They are qualified to take collective action in compliance with antitrust, tax and lobbying laws. The issues affecting the industry are extremely complex; therefore, OLA consults with several experts to stay abreast of events impacting the industry. The Alliance is there to advise and educate consumers and resourceful for policy makers at both State and Federal levels (Jones, Liz., 2014).

Borrower Demographics Most payday loan borrowers are white women between 25 and 44 years old (Herbert L. White., 2013). Most borrowers are dealing with persistent cash shortfalls (Payday lending in America., 2013). About 58% of consumers have trouble meeting their regular bills at least half of the time, including one-third saying they have trouble meeting their bills most of the time (Payday lending in America., 2013). Additionally, there are five groups that are more likely to use a payday loan: African Americans; people without a four-year college degree; home renters; people who earn less than $40,000 a year and those who are separated or divorced (Herbert L. White., 2013).

Listed below are additional details related to payday loan customer demographics:
90 percent have a high school diploma or better (CFSA.).
54 percent have some college or degree (CFSA.).
53 percent are under 45 years old (9 percent are 65 or older) (CFSA.).
63 percent have children in household (CFSA.).
32 percent own homes (CFSA.).
54 percent have major credit cards (CFSA.).
100 percent have steady incomes (CFSA.).
100 percent have checking accounts (CFSA.).

Why are consumers using payday loans? Payday loans are typically viewed as helpful for unexpected bills or emergencies. Sixty-nine percent of borrowers use the loans to cover a recurring expense, such as utilities, credit cards bills, rent or mortgage payments, or food (Payday lending in America., 2013). Sixteen percent use the loan for unexpected expenses (Payday lending in America., 2013). Individuals are using payday loans to avoid borrowing from family and friends and to avoid cutting back on their current expenses (Carrns, Ann., 2013). However, 41% of borrowers say they need a cash infusion to pay off their payday loans debt which leads them to seek out money from family, friends and often times religious organizations. From a survey of 80,000 payday loan users, it was determined that one in ten borrowers used a payday loan for automobile repairs (Rust, Adam., 2012). This finding is ironic as this is the story most commonly used by payday lenders to personalize the need for their loans.

The Community Financial Services Association of America, a group that represents payday lenders suggests, “Short-term credit products are an important financial tool for individuals who need funds to pay for an unexpected expense or manage a shortfall between paychecks. In our current economy and constricted credit market it is critical that consumers have the credit options they need to deal with their financial challenges (Carrns, Ann., 2013).

Payday Lenders’ Target Market Payday lenders benefit most from “prior prime” borrowers (Rust, Adam., 2012). Prior prime borrowers are defined as once having a prime credit rating, but who no longer do because of some financial crisis within the last two years (Rust, Adam., 2012). Individuals within this segment generally have higher incomes and are less likely to default (Rust, Adam., 2012). Currently, the prior prime consumers make up about 38% of the payday loans consumer base, but are the most profitable segment for payday lenders (Rust, Adam., 2012). Clearly, the repeat customers within this segment are the most profitable for the lenders.

Many studies on the locations of payday loan establishment suggest the lenders target minority neighborhoods. Several of the studies have found that are indeed more likely to locate in neighborhoods with disproportionately large Hispanic and/or black populations (Morgan P. Donald, Pan J. Kevin., 2012). Additionally, there are obvious racial differences between users and nonusers of payday loans which are consistent with the target market critique of payday lenders. Blacks represent 22% of users and 12% of nonusers (Morgan P. Donald, Pan J. Kevin., 2012). Hispanics accounted for 15% of users and 9% of nonusers (Morgan P. Donald, Pan J. Kevin., 2012).

Economic Impact in the U.S According to an article from the Insight Center for Community Economic Development, payday lending industry had a negative impact of $774 million in 2011, resulting in a loss of more than 14,000 jobs (Lohrentz, Tim., 2013). U.S. households lost an additional $169 million as a result of an increase in Chapter 13 bankruptcies linked to payday lending usage (Lohrentz, Tim., 2013). Payday loan interest totaled $3,309,926,773 in 2011 (18). “The economic activity generated by payday lending firms receiving interest payments is less than the lost economic activity from reduced household spending (Lohrentz, Tim., 2013). More specifically, each dollar in interest paid subtracts $1.94 from the economy through reduced household spending, while adding only $1.70 to the economy through spending by payday loan establishments (Lohrentz, Tim., 2013). As you can infer, for every dollar paid in interest an estimated 24 cents is lost in the U.S. economy. Due to the fact that low and moderate income households spend such a high percentage of their income, a dollar added to a household will generally have a great positive impact on the economy compared to a dollar added to a business (Lohrentz, Tim., 2013).

In the study it was estimated that is the households had hung on to the $3.3 billion in interest paid to payday lenders, they would have generated $6.34 billion in economic activity which is estimated to create 79,000 jobs (Lohrentz, Tim., 2013). The net loss to the economy is said to be concentrated in the following industries:
Healthcare
Education
Retail Trade The five states with the greatest amount of payday loan interest charged are California, Texas, Florida, Mississippi, and Illinois (Lohrentz, Tim., 2013). Each of the five stated lost an estimate of 800 jobs in 2011 due to payday lending and the losses per state range from $135 million in California to $55 million in Illinois (Lohrentz, Tim., 2013).

In another study, a correlation was found between approved payday lending applications and Chapter 13 bankruptcies (Lohrentz, Tim., 2013). The study found that payday borrowers were five time more likely to file for bankruptcies than the general population (Lohrentz, Tim., 2013). “When the $169 million loss is combined with the $774 million loss in value added to the economy, the total economic loss resulting from payday lending in 2011 comes to $943 million (Lohrentz, Tim., 2013).

Payday Loan Loss Rates The loss rates for payday lenders, meaning the amount of money no paid by borrower, are about 3% of funds – about $2.98 per $100 lent (Payday lending in America., 2013). However, industry analyst’s calculations suggest that 97% of payday loans are eventually paid (Payday lending in America., 2013).

Collection Processes A lender may collect a payday loan in default by directly engaging in collection activities on its own behalf, by assigning collection activity to third parties for a fee, or by selling defaulted debts to a third party (CFBP). The Fair Debt Collections Practices Act does not apply to a lender collecting debts under its own name (CFBP). Lenders may choose to report information about a borrower to a consumer reporting agency, which may impact the borrower’s credit score (CFBP). The lender must ensure their employees or third-party contractors are following the guidelines listed below:

Employees and third-party contractors do not disclose the existence of a consumer’s debt to members of the public without the consent of the consumer, except as permitted by law (CFBP).

The lender has policies on avoiding repeated telephone calls that abuse or harass any person at the number called (CFBP).

Kansas City Online Payday Lending Today, Kansas City is known to be one of the ‘hubs’ of the online payday loan industry (Kansas City Star., 2013). The birth of this industry in Kansas City came from a somewhat incestuous web of sources. By 2006, Kansas City had multiple online payday lending companies, many tagged with collection agencies, it had a company purchasing bad debt from the online lenders, it was the jump off point for the Washington D.C online lenders lobbyist group, and it housed one of the biggest sources for online consumer applications.

In 2002 a local Mission, KS resident, Joel Tucker, started a company called Bahamas Marketing Group (Hudnall, David., 2013). The company provides software services and transaction processing services to consumer finance companies. Its software-as-a-service approach includes loan management software capabilities, data analytics, and customer acquisition and qualification (Bloomberg Business Week). Bahamas Marketing Group, later BMG, Inc, then eData Communications, is the main source for online payday loan applications. While a small percentage of the loan applications are processed through individual lenders, the majority are purchased from a 3rd party (eData.) (Okun, Sarah.). Each lending entity contracts with eData to purchase a certain number of applications. eData in turn agrees to ensure the quality of the application. As an example, the lending company will contract with eData for $10,000 a month for 100,000 applications and eData ensures that 80% of those applications will actually result on a consumer loan (these numbers are for explanation only and in no way reflect the actual agreements between the data provider and the lender).

Founded in 2005 by another Kansas City local, Mark Curry, the Online Lenders Alliance (OLA) is a lobbyist group now located in Washington D.C. that represents the growing industry of U.S. based companies offering online consumer short-term loans (Hudnall, David., 2013). In addition to the OLA, Mr. Curry had an online payday loan business named Geneva-Roth Ventures based out of Mission, KS (Kansas City Star., 2013). Geneva-Roth has since closed and OLA is Mr. Curry’s primary business (though next to impossible to find his name on it). The Online Lenders Alliance sets the standard for quality lenders. In order for an online lender to be a member they must abide by the regulations outlined by OLA.

In 2008, yet another Mission Hills resident, Vincent Hodes started an investment company called Vianney Fund, LLC (Hudnall, David., 2013). Vianney Fund, LLC, also known as Vianney Investments, LLC buys debt from short-term online loans at pennies on the dollar and (Hudnall, David., 2013). While Vianney closed their doors some time ago, Mr. Hodes is still active in the industry. You’ll find his name attached to lending entities such as Sky Loan Online (SLOC) and Blue Sky Lending. Both are tribal online payday loan companies.

In 2005, a few other local Kansas City dwellers pooled their sources and started an online payday loan and collections company called LTS Management (Okun, Sarah.). LTS has done business with all of the aforementioned business owners (Okun, Sarah.). With all those mutually beneficial businesses in practically the same zip code, there’s not wonder Kansas City has become known as a center for online payday lending and the exploiters that come with it.

Regulations and Restrictions Over the past year, the online lending industry as a whole has been attacked. In March of 2013, the Department of Justice disclosed the beginnings of an investigation dubbed “Operation Choke Point” (Cocheo, Steve., 2013). The investigation aims to prevent fraudsters from accessing consumer bank accounts by choking off their access to the payments system. Its effects have been felt by banks, payment processors and companies that make short-term consumer loans over the Internet, with some industry officials arguing that at least some of the affected online lenders are legitimate businesses. According to the American Banker, state bank regulators are expressing their concern that the DOJ and federal bank regulators "Operation Choke Point" is attacking more than the bad guys that the operation is intended to target (American Banker., 2014). Banking regulators in states that allow payday loans have become concerned that legally operating lenders are losing their banking relationships as a result of the multipronged federal effort. Locally, Missouri Bank has become a part of a class action RICO (Racketeer Influenced and Corrupt Organization Act) lawsuit (Hudnall, David., 2013) stating they “consider the lawsuit to be without merit, and… will vigorously defend against it” (Hudnall, David., 2013). This RICO lawsuit involves multiple banking and ACH processing companies throughout the U.S. Due to the high volume of ACH transactions that are processed daily from any online lending company and the related bank fees (charged to the lenders, not the consumer), the industry has been appealing and profitable for banks as well. With the launch of “Operation Choke Point” banks began dropping their online lending customer as little as a week’s notice (Okun, Sarah.).

By 2013, prior to the DOJ investigation, the boys club of online lending was booming in Kansas City with call centers, lending, and collections companies throughout the metro employing several hundred Kansas City residents. Within weeks of the announcement of the investigation and the resulting destroyed banking relationships, the online payday lending business had all but dried up. The cash flow had come to a total halt. Compliant companies like LTS Management with a multi-million dollar portfolio had nowhere to process their customer payments (Okun, Sarah.). A year after the launch of “Operation Choke Point”, call centers are all but shut down. An industry that used to employ several hundred Kansas City residents now employs dozens. In an attempt to stamp out fraudulent lending, the DOJ has crushed an entire industry. This investigation has become a heavily discussed topic in the business banking industry. The Bank Lawyers Blog has recently published several articles addressing the issue. In one of their more recent posts, Margaret Liu, senior vice president at the Conference of State Bank Supervisors was quoted:

“The worry is that banks — in the face of growing pressure from federal banking agencies and the Department of Justice, which is operating an investigation known as Operation Choke Point — are severing ties even with licensed payday lenders… This is a troubling development… ”she said during a panel discussion at the spring meeting of the American Bar Association's business law section. "It is one thing to be ensuring that a business partner, the client of a bank, is operating legally," she said. But a line is crossed when a payday lender "is being denied banking services because of concern about a federal agency advancing its own policy agenda, beyond appropriate supervisory responsibilities" (Cocheo, Steve., 2013).

So, as the investigation moves forward and the complaints become louder from both bankers and the OLA, it seems likely that the DOJ should ease up on the restrictions. While it is obvious that there is an issue with corruption and racketeering in the payday loan trade, the DOJ needs to work on finding a way to prosecute the wrongdoers that doesn’t choke out the legally operating entities. Payday loans always have been and always will be a hot topic for political morale and business ethics. Regardless of the emotions the topic stirs, payday lending is just part of the free enterprise system. Instead of focusing on efforts on shutting down an entire industry, the DOJ and FED need to pool their efforts into effectively regulating the industry in a way that reflects fair business practices.

Citations
1. Caldwell, Miriam. (2014). What Is a Payday Loan? About.com. Retrieved from http://moneyfor20s.about.com/od/typesofdebt/g/payday_loan.htm
2. Watson, Stephanie. (2014, April 27). 10 careers for people who love to travel. HowStuffWorks.com. Retrieved from http://money.howstuffworks.com/10-careers-people-love-travel.htm
3. Shree, Apurve. (2013). Different Types Of Payday Loans. Streetdirectory.com. Retrieved from http://www.streetdirectory.com/travel_guide/151833/payday_loans/different_types_of_payda y_loans.html

4. PayDayLoanpay.com., (2011-2014). Payday loan in the USA. PayDayLoanpay.com. Retrieved from http://www.paydayloanpay.com/loans_in_the_usa.html
5. Online Payday Loans (2014). The history of payday loans. Cash Loans. Retrieved from http://cashloans.org/history-payday-loans
6. Wikipedia. (2014). Payday loan. Retrieved from http://en.wikipedia.org/wiki/Payday_loan
7. Chadwick, Danny. (2012). The pros & cons of payday loans. TopTenREVIEWS. Retrieved from http://payday-loan-service-review.toptenreviews.com/las-vegas/the-pros.html
8. NJ Highland Council. Payday loans: pros and cons. NJ Highland Council. Retrieved from http://www.njhighlandscouncil.org/payday-loans-pros-and-cons.php
9. Jones, Liz. (2014, March 26). OLA statement. OLA Online lending alliance. Retrieved from http://www.onlinelendersalliance.org/ 10. Herbert L. White. (2013, February 28). Survey reveals payday loan demographics white women, blacks among the most likely users. The Charlotte post. Retrieved from http://www.thecharlottepost.com/index.php?src=permalinks/comments:_Survey_reveals_payday_loan_demographics 11. CFSA. Customer demographics. CFSA. Retrieved from http://cfsaa.com/about-the-payday-advance-industry/customer-demographics.aspx 12. Rust, Adam. (2012, July 9). Four Interesting Findings about Payday Lending. Bam Talk. Retrieved from http://banktalk.org/2012/07/09/four-interesting-findings-about-payday-lending-demographics 13. Carrns, Ann. (2013, February, 27). Why borrowers use payday loans. NY Times. Retrieved from http://bucks.blogs.nytimes.com/2013/02/27/why-borrowers-use-payday-loans/?_php=true&_type=blogs&_r=0 14. Morgan P. Donald, Pan J. Kevin. (2012, February 8). Do Payday Lenders Target Minorities? Liberty street economics. Federal Reserve Bank of New York. Retrieved from http://libertystreeteconomics.newyorkfed.org/2012/02/do-payday-lenders-target-minorities.html#.U1vX8VVdWSo 15. (2013, February). How borrowers choose and repay payday loans. Payday lending in America: Report 2. The PEW charitable trust. Retrieved from http://www.pewstates.org/uploadedFiles/PCS_Assets/2013/Pew_Choosing_Borrowing_Payday_Feb2013.pdf 16. Lohrentz, Tim. (2013, March). The net economic impact of payday lending in the U.S. Insight. Retrieved from http://www.insightcced.org/uploads/assets/Net%20Economic%20Impact%20of%20Payday%20Lending.pdf 17. CFBP. Short-term, small-dollar lending. CFBP Examination procedures. Retrieved from http://files.consumerfinance.gov/f/2012/01/Short-Term-Small-Dollar-Lending-Examination-Manual.pdf 18. Kansas City Star. (2013, September 24). Kansas City area taking the lead in the online lending industry. CCO. Retrieved from http://www.cco.org/news/coverage?id=0095
21. Hudnall, David, (2013, December 3). How KC's wealthiest enclaves became a shadowy nexus of predatory lending. Pitch News. Retrieved from http://www.pitch.com/kansascity/payday-loan-industry-scott-tucker/Content?oid=4044440&showFullText=true
22. Bloomberg Business Week. Retrieved from http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=49 922682
23. Okun, Sarah. Personal knowledge.
24. Cocheo, Steve. (2013, April 27). FDIC "Clarifies" Guidance. Bankers Hub. Retrieved from http://www.banklawyersblog.com
25. American Banker (2014, April 28). Retrieved from http://www.americanbanker.com/gallery/timeline-operation-choke-point-1066360- 1.html
26. Hudnall, David, (2013, December 10). Cashing Out: The Usury Suspects, Part 2. Pitch News. Retrieved from http://www.pitch.com/kansascity/usury-suspects-part-2-payday-loans-del-kimball-edata-solutions/Content?oid=4055851&storyPage=2