The Toronto Star reports that this week was not a good one for National Money Mart, a Canadian company that sells itself as a convenient means for real people to get fast cash.

First, the chain of 350 payday loan outlets was criticized by a grassroots organization known for its campaigns against predatory lending here and south of the border. Then, the Supreme Court of Canada dismissed a bid by the company, owned by U.S. parent company Dollar Financial Corp., to derail a class-action suit launched by Windsor, Ont., pensioner Margaret Smith, who alleges the fees and interest violate Canadian law.

"It puts a little bit of heat on Money Mart," said lawyer Jasminka Kalajdzic, of Sutts & Strosberg, the Windsor law firm representing Smith. "It's a major event in that, had they won, that effectively would have been the end of class-action litigation against Money Mart."

The Supreme Court of Canada dismissed Money Mart's bid to throw out lower court decisions that found waivers the company had customers sign did not preclude them from suing the company.

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The Washington State Legislature is rebuffing efforts by the military and consumer advocates to impose tighter regulations on payday loan firms, according to today's Tacoma News-Tribune. Fifteen bills aimed at payday cash loan regulation have been killed by lawmakers, now in the final week of their 2006 session.

“There were more editorials, more news reports about predatory lending and what it’s doing, yet there’s a group of people who don’t believe there’s a problem,�? said Rep. Sherry Appleton, a Democrat who has sponsored five of the regulatory bills.

Backers cite the 60-day legislative session's tight deadlines, along with backroom squabbling and the political weight leveraged by the lenders.

The U.S. Department of Defense, which has targeted the payday industry as an issue states should better regulate, asked the Washington State Legislature to cap payday loans at 36 percent and give borrowers more time to repay the loans. Presently, a $500 two-week payday loans carry a 390 percent APR. Military officials say this affects military readiness, as service members have been pulled from deployments due to unpaid loans.

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Now that payday loans are essentially eliminated from the state, where will residents of North Carolina turn for quick cash needs?

According to an article in The Charlotte Observer, consumer advocates believe the demand was created by the suppliers. The Center for Responsible Lending in Durham, a payday advance critic, estimates 99 in 100 payday loans are made to repeat customers.

"Once a person walks through the front door for the first time they're going to keep coming back" because the high fees lead borrowers to repay their loans by taking another loan, said Yolanda McGill, a CRL policy counsel.

If you face a one-time shortfall, what can you do aside from consider a payday loan? McGill suggests:

• Asking your employer for an advance on your next paycheck.
• If you regularly struggle to pay your debts, seek credit counseling.

"If you can't make ends meet, taking on another debt will never improve your situation," she said.Perhaps the most direct replacement for cash advance stores is offered by an unlikely group: mainstream banks. These companies increasingly advertise their overdraft fees as a service to customers.

The fee is charged when a customer writes a check for more than the amount in his/her account. If the customer is allowed to overdraft the account, rather than bouncing the check, they are borrowing money now and paying the bank with their next deposit - the same basic idea that underlies a fast cash advance.

Banks charged an average overdraft fee of $26.90 as of November, according to Bankrate.com. If the fee was an interest rate, it would rival the sums charged by payday lenders, and the practice would be illegal in North Carolina.

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Quick cash is easy to get in Missouri. But it's not cheap.

The St. Louis Post-Dispatch reports that the payday advance industry is booming in the Show Me State, with agencies offering short-term consumer loans — no credit check required — with a two-to-four-week maturity. The average costs of payday loans in Missouri are $15 per $100 borrowed.

At an annual percentage rate (or APR), that translates to 391 percent. Missouri has one of the highest interest rate caps in the country — up to 1,950 percent annualized. By comparison, an Illinois payday loan reform bill was passed in December, capping loans at $1,000 or 25 percent of a customer's income, whichever is less.

Nationally, payday cash advances generate $45 billion per year. In Missouri, businesses have popped up in middle-class suburbs in addition to the low-income neighborhoods where they are often seen.

"If you look at our customer base, it's defined as the middle-income working American," said Jamie Fulmer, spokesman for Advance America. "In order to have an account with us, they have to have an open and active checking account and a regular source of income. These are everyday working people."

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Greg Oder represents the 94th District in the Virginia House of Delegates. In an unusual move, he struck down his own payday loan bill last month.

In a recent letter to The Daily Press, Oder defended this course of action. He assured readers that future action would be taken on payday loans.

Here's an excerpt:

I have received some questions regarding my decision to strike the payday lending regulations bill that I was presenting on the floor of the House of Delegates. I have already committed to submit the original payday lending bill I carried this year again in 2007. This legislation will impose significant regulations on the payday lending industry.

Unfortunately, the original bill I submitted this year failed to pass the House Finance Committee by one vote. As you can imagine, my original bill was strongly opposed by payday lending representatives. Simply put, they won and Virginia lost.

Therefore, in an effort to get some victory for Virginia, I convinced the committee to reconvene at the final hour and vote on a less restrictive bill. Although this new bill provided additional regulations that do not exist today, it did not provide the restrictions and oversight provided in the original bill. It was the best hope to provide some regulations given that the original bill had not passed the full committee.

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The Federal Deposit Insurance Corp. is at it again. The organization has pressured Republic Bank & Trust Co. to get out of the business of payday loans and cash advances.

As a result, the bank is ending its partnership with ACE Cash Express, a company that offers Republic’s payday loans in Texas, Arkansas and Pennsylvania.

The Louisville-based banking company said it received a letter from the FDIC encouraging it to end the payday lending business because of financial risks. In several states, people can take out high-interest, short-term loans and repay them when they get their paychecks.

Consumer advocates have criticized the payday loans, however, saying the high fees and interest rates keep low-income people in a constant state of debt.

Overall, cash loans earned $2.27 million for Republic in the three-month period that ended Sept. 30, about 28 percent of its net income. That percentage dropped in the final three months of the year after Republic ended its relationship with Advance America.

The City Council of Gresham, Oregon will not regulate payday loan interest rates but is considering placing restrictions on terms and conditions, according to the Oregonian. With an estimated 14 payday lenders scattered across strip malls and on most of the city’s major streets, Gresham is one of several municipalities contemplating ways to limit (or at least control) Oregon payday loan proliferation.

The city’s payday advance lenders say they provide an essential service, a good source of cash for people who need a brief loan fast. But annual interest rates that range from 391 percent to 520 percent have consumer advocates urging action. The Gresham City Council must decide whether to regulate payday loans by mirroring a Portland payday loan law passed last month in the state’s biggest city.

Cities aren’t allowed to cap the payday companies’ interest rates, said Gresham City Councilor David Widmark, who proposed joining Portland’s effort. But the city can try to keep people from digging a hole of debt that they can’t climb out of, and that means limiting their reach.
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After pondering the issue of whether or not to require a quarter-mile between payday loan stores in the state, the City Council voted unanimously Tuesday to limit where these institutions can do business.

Council members said the restrictions were needed to prevent clustering of lending sites and help protect residents from what some have described as exploitative lending practices that charge clients high interest rates and assess stiff fees and penalties.
The ordinance restricts new payday lending operations, not those already in business.

Gertie Salazar, the district manager for Checkmate, said payday lending provides a vital financial bridge for emergencies when people have nowhere else to go, such as when a family member is hospitalized.

She said her stores provide good jobs and said many customers who use payday loans are well-educated. She said the restrictions will limit competition and drive up prices.

The office of the Arkansas Attorney General is suing a Jonesboro, Ark., payday loan business and asking a judge to shut down the operation for charging interest rates as high as 520 percent.

The Arkansas News Bureau reports that lawsuit, filed Tuesday in Pulaski County Circuit Court, accuses Money In A Flash of charging “unconscionable and unlawful interest rates. It alleges that the owners of the business entered into contracts with consumers for loans with exorbitant and illegal interest rates.

The terms of the contracts allowed consumers to receive up-front payday advance loans disguised as “rebates” from the company, according to the lawsuit, and allegedly required them to make monthly or biweekly payments of up to $60 to the company — which translates to APRs of more than 500 percent.

Attorney General Mike Beebe called the practice “an especially egregious example of a company using deceptive practices to take advantage of consumers through illegal high-interest rates” in a written statement.

He added that the company “not only charged outlandish interest rates to customers who received these ‘rebates’, but withdrew money directly from bank accounts if they did not pay in cash on schedule.”

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Another state has tightened up restrictions on payday loans - so much so, cash advances may not even exist in North Carolina anymore. The three major payday loan lenders still operating in there are about to close their doors for good.

State Attorney General Roy Cooper says deals with Check Into Cash, Check ‘n Go and First American Cash Advance just about eliminate payday lending in the state.

The three firms will pay $700,000 to non-profit credit counseling offices as part of the deal. The agreements come after the state banking commissioner ruled in December that Advance America was breaking state lending laws by charging an APR of more than 400 percent.

North Carolina’s Consumer Finance Act caps annual percentage rates on small loans at 36 percent. Advance America appealed the ruling, but agreed to close their offices while the matter is being sorted out. Cooper says the three lenders who entered Wednesday’s agreement operate 152 outlets statewide.