By: Gaurav Bhola, MSM, Managing Editor
Payday loans are in the news again. In South Carolina, State Senator John Hawkins is again going after the cash advance payday loans industry. Hawkins is from the city of Spartanburg, which is the headquarters for one of the biggest payday loan companies in the country, Advance America Cash Advance. Advance America has over three thousand cash advance loan retail locations throughout each state. However, it doesn’t matter to Hawkins that Advance America hails from South Carolina, he wants to chase out payday loan lenders from the state.
Hawkins’ allegations against the entire industry are generalized. The State Senator claims that all payday lenders have found loopholes in other state laws that have capped interest rates, disclosure regulations, finance fee limits. The payday industry refutes the generalization of Hawkins’ claims. Hawkins has long been a thorn in the side of the payday industry.
He has spent his career as attorney taking on the payday loan industry by suing them on behalf of former cash advance customers.
Cash Advances or payday loans are short-term personal loans that are offered to loan borrowers until their next payday. Generally, the payday loans are meant to be paid back by the next paycheck, but under certain circumstances the loan can be rolled over.
Payday loans have become immensely popular since the 1990s. It has become a multi-billion dollar industry. In the new millennium, lenders have also leveraged the power of the internet to bring more convenience to their customers. Online payday loans, faxless payday loans, or no fax cash advances have given borrowers the ability to quickly get access to emergency funds by applying online instead of waiting in line at a cash advance retail store.
Hawking would like to squash all payday lending in the state, basically institute statewide prohibition against these short-term emergency personal loans. He deems this as the only full-proof way to protect consumers as he sees it.
Many in his state rely on these loans to access fast cash in order to meet obligations such as credit card payments, medical bills, and more.
In some cases, without access to fast cash consumers end up being placed in precarious situations. Hawkins argues that the mere access to cash loans places the consumers in precarious financial situations irrespective of personal circumstances.
Hawkins is vociferously opposed by Advance America and the entire payday industry. Advance America, a big player in national- and state-level politics has fired salvos back. The company questions Hawkins’ objectivity on any payday loan measures, due to his past involvement with the consumer lawsuits against the fast cash advance loan lenders. It is not clear who will win in this contentious battle.
