07
Apr

Those States Making Payday Loans Illegal Only Hurting Their Own Economy

Posted by Al

In 2004, state of Georgia passed a law that made payday lending illegal in that state. As the results many cash advance and payday loan stores including the Advance America, one of the largest chain stores, closed hundreds of locations, resulting thousands of job loss and putting the already troubled state in more economic trouble resulting in almost $20 million a year net loss of revenues.

The goal of this law was to prevent the Georgian residents from taking high interest payday loans in an effort to reduce their debt. However that doesn’t seem to be working in this case as many of the State residents are applying with online payday lenders and finding other ways to take such loans.

Although direct payday lenders such as Pay1Day.com don’t provide payday loans to residents of Georgia, but there are some online brokers that have found loopholes that have enabled the residents of Georgia to take payday advance loans online. “There is a huge need for this service (in this state),” said Allan Jones, founder and chairman of Check Into Cash Inc.  whose stores in that state were forced to close or downgrade to traditional check cashing as the law passed in 2004. He further said “They can criticize  it (and pass all the laws) they want to, but that doesn’t change the need.”

Payday Loan Watch also confirms that thousands of  Georgians cross state lines to take out payday loans in addition to going online.

This problem doesn’t seem to be limited to Georgia, but also other States that have banned payday lending from their States seem to have lost many jobs and revenue. and further putting their State and their residence in economic hardships.

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