Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/122387
r E t a i l i n g t o d a y Pay it forward An Appetite for loAns stirs storefront lenders' hunger for leAses By Spencer Rumsey E very year millions of americans turn to storefront lenders with personal financial needs that traditional banking institutions cannot — or will not — fulfill. Cash advances against payday, check cashing, money orders, bill payments, small loans — consumers with these types of needs find the quick relief they are looking for, and the market has responded in kind. This industry represents some 13,000 neighborhood outlets, in shopping centers and stand-alone locations, which serve an estimated 30 million customers each year. These businesses conduct some 350 million transactions annually, amounting to about $106 billion, according 66 SCt / M A y 2 0 1 3 to the Financial service Centers of america (formerly the national Check Cashers association), which represents storefront lenders. "We serve the predominantly middle-income class," said amy Cantu, a spokeswoman for the Community Financial services association, which represents 8,700 payday stores across 32 states. The users of these services typically earn between $25,000 and $50,000 yearly, most have a high school education and roughly half own a home. "Part of the benefit of payday-loan storefronts is the ease of access and the ease of the transaction process," said Cantu. "our goal is to make it easy for our customers to get the money they need to bridge to their next paycheck." The typical payday loan is about $325 and remains outstanding for about two weeks, with fees — apart from interest — coming to about $15 per every $100 borrowed. This equates to an annual percentage rate approaching 400 percent, according to Financial service Centers. Payday lenders argue that consumers appreciate the convenient, flexible, pay-asyou-go nature of the services these centers provide. They are certainly in demand. as of 2012 only 17 states and the District of Columbia had laws prohibiting payday loans — defined as loans due in full by the time the borrower receives his or her next paycheck — according to Financial service Centers. in the states that allowed them, the maximum advance ranged from $300 in California to $1,500 in Wisconsin. legislation pending in new york would let check-cashing stores get into the payday-lending business, which is currently prohibited by the state's usury