Monday, October 15, 2007

According to The Wichita Eagle…

A program that allows no faxing payday loan customers more time to pay off their debt is now available at stores that belong to the Community Financial Services Association.

The extended payment plan is one of several new “best practices” that members of the association must meet to remain in the trade group, which represents about two-thirds of the industry.

Stores belonging to the association started offering the repayment plans Aug. 31. Customers can ask at each store if it’s a member.

The programs give customers at least four more payment cycles to take care of their loan. For example, if a cash advance were due in two weeks, the customer would get eight additional weeks if needed, at no additional cost. The association has been collecting information from member stores about use of the program in the past two months, said spokeswoman Lyndsey Medsker.

Most customers pay off their loans on time, said Tom Linafelt, spokesman for QC Financial, an Overland Park-based company that does business as Quik Cash. It has five branches in Wichita.

“For the few who do need to (use the repayment plans), they’re very important,” Linafelt said. “If they’re unable to meet the terms of their loan agreement, they’re thankful we have this safety valve for them.”

The association in February announced several new practices for its stores. The group also banned ads that promote payday loans for “frivolous” purposes such as vacations.

Quik Cash is owned by QC Holdings. Its president is Darrin Andersen, who is also president of the trade association.

Some consumer advocates say that while customers may pay off their payday advance loans in time, many are only able to do so because they get money from another payday lender.

Jeff Witherspoon, executive director of Consumer Credit Counseling in Wichita and Salina, said his group, which helps people with debt, has seen many people with multiple payday loans.

One client had 29 loans out at one time totaling $10,000, he said.

Witherspoon said he did think the repayment plans could be helpful to customers who have taken out several payday advances and can’t get them paid back.

He said the client with 29 loans filed for bankruptcy.

This entry was posted on Monday, October 15th, 2007 at 3:37 pm and is filed under Kansas.