A workshop sponsored by the Kansas City Public Library Payday Loans A workshop sponsored by the Kansas City Public Library

Objective What is a Payday Loan Types of Payday Loans Missouri and Kansas Laws Alternatives and Repayment New Regulations Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Information About Payday Loans Payday loans are an expensive form of credit Online payday loans are the fastest growing loan service 12 million Americans take out payday loans each year Payday consumers spend more than $7 billion on loan fees each year The payday loan market is not competitive, so lenders charge the max rate Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Common Reasons For the Loan Shortfalls No emergency savings Risky credit or no credit Expenses outweigh income Fast and convenient Less underwriting Not banking Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

What is a Payday Loan A payday is a short-term loan that is generally $500 or less that is secured by a personal check or paid by electronic transfer. The loan is typically due on the consumer’s next pay period. Characteristics of payday lenders Consumers Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Different Types of Payday Loans Traditional- Storefront Payday Loan Title Loan Online Payday Loan High-Interest Installment Loan Pawn Shop Loan Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Traditional Storefront Rollover Renewal Limits Charge per $100 Interest rates are typically over 400% 7-14 day loan $500 max Rollover Renewal Limits Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Title Loan A short-term loan using your car as collateral 15-30 days High interest rate Triple Digits Access Key GPS Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Online Payday Loan Small cash loan accessed online Electronic access to your checking account High interest rate Risk Factors Legal State stance Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

High Interest Installment Loan Unsecured loan paid in small monthly increments High interest rate Triple digits Term: Months to years Storefronts Online Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Pawn Shops Collateral Loans Length of Loan: Weeks to months Average loan amount is $150 State Law: Determine interest, extension, and renewal Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Debt Trap Snap Shot Original Loan Agreement Renewal Chart: Loan Amount Cost Total Amount Time Frame Apr 500.00 65.00 565.00 2 weeks 474.50% Renewal Chart: 1 Month 2 months 3 months 65.00 Total: 130.00 130.00 Total Amount: Renewal: $390 + Loan: $565 = Overall Total: $955 Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Missouri Law Maximum loan amount Term Renewals Fee or rate Laws Snap Shot (2014) Maximum loan amount $500 Term Minimum of 14 days Maximum of 31 days Renewals Limited to 6 Fee or rate Max of 75% of the original principal interest/1980% 898 payday lenders 1.87 million payday loans issued Average loan amount of $309.64 APR: 451.91% $53.67 on a 14-day loan 32 complaints Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Kansas Law Maximum $500 2 loans per borrower 3 loans per 30 days Rate/Fees $15 per $100 Term Min 7 days Max 30 days Rollovers Not allowed Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Payday Loan Alternatives Next Step Loan Budgeting Pay Yourself First Contact your Creditors Credit Banks Overdraft Loans Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Repayment Stop Out of the Box Research Talk to your creditors Raise the cash/Sell Adjust your tax withholdings Secondary employment Cash advance from employer Borrow Credit Card Bankruptcy Stop Research Talk to your creditors Installment plans Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Legal Action Collections Closing your account Judgments Garnishments Future access Banking history Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Consumer Rights Truth and Lending Statement Disclosure Tips to avoid predatory lenders Consumer Financial Protection Bureau Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Resources and References Consumer Finance Protection www.consumerfinance.gov Federal Trade Commission https://www.ftc.gov Consumer.gov https://www.consumer.gov/ Center for Responsible Lending http://www.responsiblelending.org/ AFSA Education Foundation http://afsaef.org/Portals/0/Resources/Understanding_Small_Dollar_Loans-8PGS.PDF Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

Resources and References Lutheran Social Service http://www.lssmn.org/debt/ Ebony http://www.ebony.com/career-finance/payday-loans-7-ways-to-get-rid-of-them-now#axzz472jZJnjb CCO http://www.cco.org Missouri Department of Finance finance.mo.gov Kansas Statue http://kslegislature.org/li_2012/b2011_12/statute/016a_000_0000_chapter/016a_002_0000_article/016a_002_0404_section/016a_002_0404_k/ Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org

H&R Block Business & Career Center At the Kansas City Public Library 3rd floor of Central Library, 14 W. 10th St. 816-701-3717 www.kclibrary.org/business-career Books on personal finance, job hunting, small business development Personal finance: Budgeting, credit, investing, real estate, identity theft Personal finance website (Sign up for more workshops on this website) Computers with software for resume and business plan writing Resources for nonprofit development

Financial Opportunity Centers Women’s Employment Network 920 Main St, Suite 100 Kansas City, MO 64105 P: 816-595-1302 Guadalupe Centers Inc. 2600 Belleview Kansas City, MO  64108 P: 816- 472-4120 Prosperity Center 5151 Troost Avenue, Suite 100 Kansas City, MO 64110 P: 816-501-4239 Community Services League 404 N Noland Rd Independence, MO 64050 P: 816-254-4100 WE CAN HELP One-on-one counseling Financial Coaching Budgeting Setting future financial plans Tools to improve credit Accountability