Economics

"If We Could Just Get Our Arms Around the Internet"

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payday lending

With gloomy economic news all around, people are fretting a little more than usual about cash flow these days. So thank god Oregon has already taken steps to keep people from safely, legally getting their hands on a little extra cash in an emergency.

Neon signs like the one at right are going out all over the state as three out of every four payday lenders close their doors after the state imposed a cap on the amount of interest they can charge. The storefronts that remain open to wrap up pending business are having to turn away prospective customers:

"The sad part is we have 25 people a day coming into our stores begging to borrow from us," said [Ken Wayco, president of small, high-interest lender], "but we can't lend to them." 

So where are those people going? Online, of course:

In Oregon, officials now worry most about residents going into debt with payday lenders on the Internet, Tatman said.

Internet lenders selling to Oregonians are required by law to register with the state and abide by its regulations, but many do not.

It is difficult for the state to control Internet payday lenders who charge triple-digit interest rates, Tatman said. "If we could just get our arms around the Internet better to make sure people don't jump out of the fire and into the frying pan."

We'll give the final word about this state of affairs to the upbeat Angela Martin, director of economic fairness for Our Oregon, a nonprofit "consumer advocacy group" in Portland.

"It is fantastic for Oregon."

More on payday lending here and here.