New city banking program does not address big picture problems
Carissa Weimer, with Cash With Us, counts out money for Joe Lafferty, of Eagle Butte, on Friday, Oct. 18, 2011. Lafferty is from Eagle Butte but was in Rapid City and needed to cash a check. Because he does not have a bank in Rapid City, he cashed his check at Cash With Us. Lafferty said he does not mind paying a fee to cash a check because it is the price he pays for convenience. (Kristina Barker/Journal staff)
How a payday loan works Write a personal check for the amount borrowed plus the fee, usually 15 percent for a two-week loan. Receive the loan amount in cash. Return on payday to pay off the loan and finance charge in cash, or allow the lender to deposit the check. Or, pay the finance charge plus 10 percent of the principal and allow the loan to be rolled over for another pay period. Payday loan laws in South Dakota A given loan store may not lend more than $500 to an individual customer. The maximum principal balance of any one loan cannot exceed $500. No law limits the total number of loans an individual can take out from different stores at the same time. There is no limit on the interest rate that can be charged for a payday loan. A loan cannot be extended, or rolled over, more than four times, and each time, the debtor must pay the outstanding fee and reduce the principal by at least 10 percent of the original loan amount.One local payday loan store operator said a new city program to steer residents away from payday loans and into banks and credit unions is, in some respects, a good idea.
"We agree there is a problem with people getting too much money and they can't pay it back," said Rob Tschetter, owner of Cash With Us check cashing and payday loan service at 406 E. North St.
But Tschetter said most customers use the loans responsibly, and the new program, Bank On Rapid City, but doesn't address some of the real reasons people turn to the loans he provides.
"I don't think they realize, they're getting loans to protect themselves from the banks," Tschetter said.
Wellsfargo Payday Advance - News
Under the bank's Direct Deposit Advance program, customers can borrow up to half of what they receive in direct deposit or $500, whichever is less. Wells Fargo charges $7.50 for each $100 borrowed, compared to about $17 nationally, Messick said.
The maximum principal balance of any one loan cannot exceed $500. No law limits the total number of loans an individual can take out from different stores at the same time. There is no limit on the interest rate that can be charged for a payday loan.
But traditional banks that are now offering payday loan-style products have been able to get around those laws, offering short-term loans with interest rates far above the 36 percent annual limits set for members of the military. Sen. Jack Reed (DR.
finance these payday loan sharks whose shops are nearly two and one-half times more likely to locate in African-American and Latino communities, even when other factors like income are considered. Turns out banks like Bank of America, Wells Fargo,
When the bank repays itself, the customer is left with about half of the monies from that deposit, forcing yet another cycle of loan and interest charges to cover other living expenses. Although Wells Fargo was the first major bank to offer this type
Can Wells Fargo garnish my wages for not repaying a payday ...
It was a loan though my bank. I needed some extra cash and was desperate so I did a payday advance with Wells. I didn't have the money to repay it, as I had bills that needed to be paid. So I closed the account before my check was directly deposited into my account. Can Wells garnish wages for to make me repay that? Or if I open an new BA will Wells garnish my new account?