Payday Loan and Check Cashing Stocks: Can Usury Be Profitable For Investors ...
In a rough economy, payday loans and check cashing stocks like QC Holdings (NASDAQ: QCCO ) , DFC Global Corp (NASDAQ: DLLR ) and The Cash Store Financial Services (NYSE: CSFS ) are booming (check out my article: “ In a Pawn Shop Economy, Are Pawn Shop Stocks Good For Investors? EZPW, FCFS, CSH ”). In fact and according to the Predatory Lending Association or PLA (Now, something tells me that having a name like that means the PLA is actually a spoof website AGAINST the payday loan industry…..), there are more than 22,000 payday loan locations across the US who extend $40 billion in loans to millions of working poor households while 90% of industry profits are generated by repeat borrowers who roll over their loans. Moreover, the Predatory Lending Association (PLA) also claims that in some states, there are more predatory payday lenders than Starbucks™ coffee shops (a statistic I would tend to believe…) but a report cited by the PLA also claims that: "Nearly nine out of ten households surveyed think that payday lending is a bad thing." Morality and the threat of a government crackdown aside, could payday loan and check cashing stock like QC Holdings (QCCO), DFC Global Corp (DLLR) and The Cash Store Financial Services (CSFS) be good for investors? Here is a closer look at all three stocks to help you decide whether usury is a good business:
QC Holdings (NASDAQ: QCCO)
QC Holdings provides short-term consumer loans from over 500 locations in the US. QC Holdings recently reported financial results are a good case study about the opportunities and challenges faced by payday loan, check cashing and other providers of short-term consumer loans. Specifically, QC Holdings reported revenues of $48.3 million and income from continuing operations of $2.1 million. QC Holdings’ Chairman and CEO noted that revenue was driven by increases in their installment and title lending products but these increases were also offset by a higher loss ratio due to the transition to new products thanks to recent changes in lending laws in several states where the company operates. QC Holdings’ loan losses had totaled $12.4 million versus $10.7 million for 3Q2010 with the loss ratio rising to 25.7% versus 22.6% for the same period last year thanks to higher losses in Illinois, Wisconsin and South Carolina where laws were recently changed. QC Holdings also noted an increase in automotive revenues despite higher vehicle acquisition prices. In other words, providers of short-term loans like QC Holdings can also face the same threats that banks and retailers face in a slow or weak economy. On Wednesday, QC Holdings fell 0.55% to $3.59 (QCCO has a 52 week trading range of $2.50 to $5.26 a share) for a market cap of $61 million.
payday loan companies in wisconsin - News
The company made just 2 cents in the year ago period. Revenue rose to $443.6 million from $440 million a year ago despite regulatory changes in Colorado, Illinois, Virginia, Washington and Wisconsin which cut revenue to $11 million from $17.3 million
Moreover, the Predatory Lending Association (PLA) also claims that in some states, there are more predatory payday lenders than Starbucks™ coffee shops (a statistic I would tend to believe…) but a report cited by the PLA also claims that: "Nearly
It cannot fully oversee payday lenders, mortgage companies, private student lenders or credit bureaus. Wisconsin families are in urgent need of a fully authorized CFPB. According to the University of Wisconsin Extension, foreclosures in the state rose
There are programs to help those in the military who are just starting families and households, helping them avoid payday lenders, for example. Similar programs could be adapted for private-sector workers, too. Chambers of commerce could set up teams
Marr, now a retired auto mechanic, purchased a home in Wauwatosa, Wisconsin, in 1973, using funds secured by a mortgage. He has refinanced that loan several times since then to help pay the bills. In early 2007, a mortgage broker called Alpine
Usury Payday Loans Law Different In Different States | NewsPost.eu ...
Due to the ingenuousness payday loan lending policy, number of States has put restriction on the interest rate. Still many states do not agree with the usury payday loans laws. It is for the same reason that 18 states have put lot of restriction in supplying payday loans. APR of 36 percent is included only. These states include Alabama, Alaska, Arizona, Connecticut, Georgia, Maine, Maryland, Massachusetts, Michigan, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, Texas, Vermont, Virginia and West Virginia. On the other hand there are 9 states that have no caps on annual interest rates for payday loans. In these states, payday loan companies can charge any APR and any amount of fees. These states are Delaware, Idaho, Illinois, Indiana, New Hampshire, New Mexico, Oregon, South Dakota, and Wisconsin.
Some of the states as well as the District of Columbia have created special legal laws for the loan sharks in order to regulate proper same day payday loans . These 23 states need to have special license for the same. Their company needs to be registered by the states government. Moreover the license needs to be renewed at regular interval of time. Cancellation of license means the payday loan lenders cannot give payday loans. Not only this, in some states there be certain amount of loan stores in a particular area. On the other hand in some states the loan stores cannot shift from one location to the other. This hinders the payday loans business of the other state. Scales stated in the meeting that business other than payday loans must be promoted.
“All I’m asking is that you give this moratorium life that we can right the wrongs of our community and make it more livable by having these different types of businesses that we know we can attract to the city,” Scales said.