Consumer Group Assists HR Departments with Payday Loans
By J.J. CameronPayday Loan Writer
In Kansas, the Sunflower Community Action group is doing more than merely setting up meeting to discuss the issue of payday loans. It's working with a handful of of local companies to educate their employees on the topic.
J.J. Selmon, community organizer for the northeast chapter of the grassroots group, said he and his colleagues have been taking calls from human resources directors concerned about employees who are taking out no fax payday loans to make ends meet.
Some directors have talked about stuffing paycheck envelopes with educational fliers, Selmon told The Witchita Eagle. They're serious about this issue.
Sunflower also wants to work with Wichita-area businesses to develop a survey employees can take about how often they take out payday loans and why.
"I see this as a financial cancer," Selmon told about two dozen people who turned out for the meeting at Church of the Living God.
Selmon also talked about a study that shows that one in five active duty military personnel has taken out a military payday loan. The Pentagon has released a report saying these cash advances have had a detrimental effect on military personnel, especially those who are deployed and have families back at home.
The Community Financial Services Association of America, which represents the online payday advnce industry, lashed out at the report Thursday, saying it was "nothing but a rehash of flawed data, biased analysis and anti-business philosophy pushed by fringe activists."
Military personnel "will be driven into the arms of unregulated offshore Internet lenders or forced to choose between more expensive alternatives such as bounced check or overdraft protection fees, or late bill payment fees" if such a cap is put on their instant payday loans, the association continued.
Monty Shaw, a member of Sunflower, said he served in the Air Force and can see why military personnel see payday loans as an easy fix. Personnel get paid like clockwork, he said, and if a lender knows your rank, he can figure out your salary.
Selmon said some payday cash loan businesses have military-sounding names, such as Armed Forces Financial, which may give borrowers a false sense of security. Area legislators are working on drafting new laws that would require a database for cash loans so that consumers could get only a limited number at a time.
While Selmon said some people might see that as limiting consumers' borrowing choices, the goal is to protect people, particularly low-income residents, from high fees.
Whitney Damron, a lobbyist for the payday lending industry in Kansas, has been critical of Sunflower's work, saying people need choices such as payday loans.
