Fast cash is a few clicks away for Minnesotans at the popular CashNetUSA website, where a two-week loan for $100 carries an annual percentage rate of about 390 percent.
To many critics, the terms are outrageous and usurious. But they are typical in the world of high-cost short-term consumer loans, or payday lending, and legal in Minnesota.
In fact, the business is supported by some of the nation’s largest commercial banks. A syndicate including Wells Fargo & Co. and Minneapolis-based U.S. Bancorp provides CashNetUSA’s parent $330 million in financing, government documents show.
Commercial banks, including Wells Fargo in San Francisco and U.S. Bank, are a significant source of capital for the country’s $48 billion payday loan industry, extending more than $1 billion to companies such as CashNetUSA parent Cash America, Dollar Financial and First Cash Financial, according to research by Adam Rust, research director of Reinvestment Partners, a nonprofit consumer advocacy group in North Carolina.
The financing relationship is largely invisible to the public, although bank regulators are well aware of it, as are consumer advocates who view payday lenders as predatory and have criticized banks for helping fuel a controversial industry. Federal regulators moved in recent weeks to tighten their oversight of the payday loan industry, but the underlying financing of the industry has gotten less scrutiny.
“What I hear less about is how it actually works, what makes it possible for payday lending to exist,” said Rust, who writes the blog Bank Talk. “It could not exist on the scale that it exists right now if not for Wall Street investments. I just think it’s the other end of the story.”
The banks argue they’re just doing business.
In a prepared response, Wells Fargo said that the lending is a small percentage of the bank’s commercial loan portfolio, and that it exercises “strict due diligence” to ensure its customers “do business in a responsible way and meet the highest standards.”
“We put our payday lending customers through this process regularly, as often as every three months and at least annually,” Wells Fargo spokeswoman Peggy Gunn said. “In fact, we put our payday lender and check cashing clients through an additional level of scrutiny — a separate, distinct compliance and credit process that includes on-site visits in most cases and a review of their business practices.”
U.S. Bank said the money service companies it deals with have to meet the bank’s strict underwriting standards. It’s diligent in reviewing them to make sure they comply with regulations, a bank spokesman said.
Fort Worth, Texas-based Cash America International Inc. declined to comment.
Via term loans and lines of credits, commercial banks provide low-cost capital to payday lenders, typically charging about 4 percent to 5 percent, said Robert Ramsey, senior analyst at FBR Capital Markets & Co. who covers publicly traded payday companies.
Payday lenders in turn can use the money to lend to consumers at triple-digit rates. They also use it for such things as acquisitions and financing periods of rapid growth.
“It’s the primary source of debt and financing that the companies use,” Ramsey said.
The “credit facilities,” as they are called, are buried in Securities and Exchange Commission documents of publicly traded payday lenders and the terms are subject to frequent changes.
If publicly held pawnshops, rent-to-own retailers, buy here-pay here lenders, tax preparers offering refund anticipation loans and debt collectors are added in, the banks have extended more than $4.5 billion in lines of credit and term loans to fringe consumer finance companies, according to Rust, who is working on a report about the financing.
Wells Fargo is the leading provider, according to Rust’s [...]
ANCHORAGE, Alaska, May 17, 2013 (GLOBE NEWSWIRE) — Northrim BanCorp, Inc. (NRIM) today announced its Board of Directors approved its regular quarterly cash dividend of $0.15 per share. The dividend will be paid on June 14, 2013, to shareholders of record as of the close of business on June 6, 2013.
“Northrim has paid a cash dividend each quarter since 1995. At the same time we have invested in growing our franchise and building our bank to provide better products and services to our customers,” said Marc Langland, Northrim’s Chairman, President and CEO.
On April 23, Northrim reported first quarter 2013 net profits rose 4% to $2.7 million, or $0.41 per diluted share, from $2.6 million, or $0.39 per diluted share in the first quarter of 2012. Because Northrim increased lending, its loan portfolio grew 9% over the preceding 12 months to $721.6 million. In total, the increase in loans, improving asset quality and an increase in net interest income contributed to first quarter earnings.
About Northrim BanCorp
Northrim BanCorp, Inc. is the parent company of Northrim Bank, an Alaska-based community bank with ten branches in Anchorage, the Matanuska Valley, and Fairbanks serving 70% of Alaska’s population; and an asset based lending division in Washington. The Bank differentiates itself with its detailed knowledge of Alaska’s economy and its “Customer First Service” philosophy. Affiliated companies include Elliott Cove Insurance Agency, LLC; Elliott Cove Capital Management, LLC; Residential Mortgage, LLC; Northrim Benefits Group, LLC; and Pacific Wealth Advisors, LLC.
Joe Schierhorn, Chief Financial Officer
DETROIT, May 17, 2013 /PRNewswire-iReach/ — People who are going through tough financial times and are in the need of urgent cash may find it very difficult to borrow money, especially if they don’t have a security deposit to payback the money on time. When it comes to students, having a personal loan for bad credit can be a real issue since they haven’t yet established any lines of credit.
Because of the increasing need of employment and lack of financial stability throughout the world, people sometimes need urgent money to cope with their problems and unexpected emergencies. By deciding to purchase a small personal loan for bad credit, customers can have the guarantee of a quick and effective lending program, to help them overcome their problems.
Many students turn to government funded loans as a solution for their needs, but in most cases, this type of credit will cost much more and will probably have higher interest rates and restrictive terms. Which is why Loans-Payday.com is offering a different alternative to students who are in the need of cash for their text books, scholarships and other expenses they might be needing for their education.
The most important aspect of these small personal loans is that they do not require students to put any personal properties or security deposits as collaterals for the loan. These unsecured loans are a great way to help students solve their financial problems and receive money in a very short period of time, without the need of risky home mortgages or property collaterals.
However, it is important to know that there are two types of personal loans people can benefit from. The above mentioned unsecured loans are the type which don’t require down payment but are sometimes harder to get because of the lack of security deposits. On the other hand, secured personal loans refer to people who have to have a collateral and, in consequence, are much more easier to get.
Loans-Payday.com has decided to help students follow through their college and education by allowing them to benefir from these small personal loans, which can usually be reapid in installments. The major difference between payday loans and this type of personal loans is that the term for repayment is longer in the last case, whereas payday loans need payback on a fixed term.
But students are not the only ones who can benefit from these small personal loans. Business owners who generally don’t have a very good credit score or are having problems with the financial aspect of their company ,can also apply for an online personal loan. These small loans can help them purchase new office equipment or extend their company by hiring more employees. Whatever the reason is, it is clear that small personal loans for poor credit can be much needed in a starting company, or firms which face economic distress.
To find out more about this issue visit: http://www.loans-payday.com/bad-credit.html
Media Contact: Maurice Chandler I.D.S International inc, 646-257-4131, email@example.com
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The fallout from Quebec’s corruption scandals has reached the epicentre of Canada’s Parliament, with the federal Opposition leader revealing Thursday he once spoke to police about someone trying to pass him a suspicious-looking envelope.
NDP Leader Tom Mulcair said he spoke to investigators two years ago about a 1994 meeting with the then-mayor of Laval, Que., who has since resigned in scandal and been slapped with criminal charges.
A newspaper report Thursday said Mulcair was offered — and refused — an envelope he believed to have contained cash.
There have been several reports over the years about Laval’s ex-mayor Gilles Vaillancourt offering provincial politicians such envelopes — and he now faces gangsterism charges for directing a criminal organization.
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Police say that for years the municipality across the river from Montreal was run like a criminal network where officials siphoned off cash from public contracts. Vaillancourt had denied the reports of cash envelopes in the past, and he denies the criminal accusations now.
Mulcair issued a statement Thursday that said little about the report in Montreal La Presse. All it said was that he shared details in 2011 with police “in order to help with their investigation.” His statement added that he immediately ended that 1994 meeting with Vaillancourt.
“This matter is currently before the courts and I will therefore avoid further comment,” Mulcair said in the statement.
His office said he would not be available to answer media questions Thursday — such as why he waited 17 years to come forward, and two more to make it public.
This matter is currently before the courts and I will therefore avoid further comment
The governing party certainly wasn’t giving Mulcair the benefit of the doubt.
A statement from House Leader Peter Van Loan accused Mulcair of remaining silent about corruption for two decades.
It also accused him of lying during a 2010 press conference, when he said he had never been offered a bribe during his time in Quebec politics.
“Why did it take a public inquiry into the biggest corruption scandal in Canadian history for Thomas Mulcair to finally come clean with Canadians?” said Van Loan’s statement.
Why did it take a public inquiry into the biggest corruption scandal in Canadian history for Thomas Mulcair to finally come clean with Canadians?
“Will he agree to appear if called to testify under oath before the Charbonneau commission?”
The statement accused Mulcair of selectively leaking the information out Thursday — when public attention might be distracted by “other stories.”
Van Loan did not point out what stories he was referring to although, in Ottawa, the government has been embroiled in controversy over Sen. Mike Duffy’s expense claims and the role of the Prime Minister’s Office in helping to clean them up.
It’s unclear whether Mulcair was in fact lying on Nov. 16, 2010, when a journalist asked at an Ottawa press conference whether he had ever been offered cash envelopes by Vaillancourt and he said: “No.”
The report in La Presse said Mulcair told police he’d actually left the 1994 meeting without opening, or accepting, a white envelope and did not know for sure that there was cash inside.
At the time of the meeting, Mulcair was a rookie provincial politician representing a Laval riding and Vaillancourt was a powerful mayor in the early stages of his six-term career.
The inner workings of Vaillancourt’s city hall are just now coming up for scrutiny at Quebec’s corruption inquiry.
The far-reaching political implications are hinted at in the La Presse report, which points to a quote in a magazine article attributed to ex-premier Jean Charest.
Mulcair is quoted telling L’Actualite magazine in 2011 that his personal problems with Charest began when he wanted to legislate to protect wetlands in Laval against Vaillancourt’s will.
He tells the magazine that the premier responded that the government couldn’t do such a thing to Vaillancourt — because, according to the words Mulcair attributed to Charest, he said he needed Vaillancourt’s help in elections.
One thing the Quebec inquiry will not touch is federal politics.
In fact, inquiry chair France Charbonneau specifically stepped in today to warn a witness to steer clear of any talk about federal parties or contracts.
Federal politics or contracts are outside the mandate of the provincial probe, charged with exploring illegal municipal and provincial party financing, corruption and Mafia ties in the provincial construction industry.
A Laval city official and former engineering executive, Jean Roberge, is currently on the stand discussing gifts given to officials outside Laval.
He had mentioned his firm received federal contracts.
“I don’t want you to talk about the federal government,” Charbonneau told Roberge.
Roberge testified Thursday that over a decade, he took part in collusion as an engineering-firm executive, and later ran the corrupt system at Laval’s city hall before ultimately becoming one of those tasked with cleaning it up.
I don’t want you to talk about the federal government
There was no question who was in charge, he said. Engineering firm officials spoke of former mayor Vaillancourt as “the boss,” and the one who signed off on the most lucrative contracts.
Roberge explained that company reps would tell him it was their “turn” to get a contract and the “boss” had confirmed they were going to win.
Roberge said he later verified with the mayor and would be given a nod or a sign that Vaillancourt had in fact promised contracts to certain firms.
Roberge had earlier admitted to taking part in collusion between 2002 and 2007 while he worked with the Equation firm. He said he paid $18,000 through a notary, with the cash destined for Vaillancourt’s party.
He said construction collusion continued until late 2009.
Roberge said that once he became deputy city manager, he began the process of dismantling engineering-firm corruption, and it was over by early 2010.
The increased media scrutiny and the arrival of an anti-corruption police squad — Operation Hammer — led to the end of the illicit practice.
Roberge admitted his role at the city was ambiguous, given that he was seeking to root out corruption on the one hand while having helped make it happen on the [...]
NICOSIA, Cyprus (AP) — Cyprus may presell the country’s offshore natural gas reserves to raise cash quickly and pull it out of its deep financial crisis, the country’s finance minister said Thursday.
Harris Georgiades said the country’s nascent gas sector still has some way to go before such weighty decisions are taken. But all options that will help the country extricate itself from the tough terms of multibillion euro rescue package that it negotiated with its euro area partners and the International Monetary Fund last March will be poured over.
“All possibilities will be examined within the framework of taking those decisions that will maximize the benefit for our economy,” Georgiades told the Associated Press in an interview when asked if the government is mulling such a gas presale.
Cyprus energy officials estimate that Cypriot waters hold about 60 trillion cubic feet (1.7 trillion cubic meters) of gas, enough to cover domestic needs for decades and supply energy-hungry foreign markets.
One recently discovered field that U.S. firm Noble Energy and Israeli partner Delek are developing is estimated to hold 5-8 trillion cubic feet (140-230 billion cubic meters) of gas.
Oil and gas companies including Italy’s ENI, France’s Total and South Korea’s Kogas have been licensed to search for mineral deposits off the island nation’s southern coast and are expected to spearhead development of a gas processing facility that will liquefy the gas for easier export.
But Georgiades said any future gas revenue won’t detract the government from enacting “whatever it takes” to fix a broken economy, including tackling an oversized public sector that had taken up nearly a third of all government spending.
The Cypriot economy is projected to shrink by 13 percent of gross domestic product in the next couple of years and see joblessness rise to 14 percent.
“We are very determined to take all necessary decisions irrespective of how unpopular we might be. It’s not a popularity contest…It will not be easy, I’m not going to present a rosy picture,” Georgiades said.
Georgiades said that limits on bank transactions that were put in place last March to prevent a bank run will be fully lifted eventually, but authorities won’t act “hastily” before trust is fully restored in the shaky banking system.
The limits, which include a daily withdrawal cap of 300 euros, were deemed necessary after the bailout agreement forced depositors with more than 100,000 euros in the country’s two largest lenders to incur significant losses. The country’s No. 2 bank Laiki, which was hardest hit from its exposure to toxic Greek debt and loans, has been wound down and folded into the larger Bank of Cyprus.
Nobody can offer a date because that won’t be done on the basis of a time frame but rather on the basis of how the market and the banking system are reacting to developments,” Georgiades said. “I see positive signs, but we shall not be making hasty steps. This has to be done carefully, not under the pressure of time.”
Georgiades said selling Cyprus’ gold reserves — another bailout condition — may not be necessary if the country finds other income to repay a 10 billion euro loan that the country will receive from other Eurozone countries and the IMF over the next four years.
“I think it goes without saying that if we’re able to determine alternatives, then there will be no need to dispose of the gold reserves,” he said, adding that Cyprus could have benefited from a “rather larger” loan that would make it easier for the country to meet its fiscal targets.
Georgiades said there would be no delay to Russia’s easing of the terms of a 2.5 billion euro loan it granted Cyprus in 2011, when it lost access to bond markets.
He said Moscow made it clear that it would lower the 4.5 percent interest rate on the loan and extend the 2016 repayment deadline by several years once the entire bailout procedure was completed.
Cyprus received its first installment of around 2 billion euros in bailout cash this week.
Georgiades said two recently-concluded independent audits have dispelled any notion that Cypriot banks were money laundering hubs. Media reports, especially from Germany, had suggested that Russian oligarchs had preferred Cyprus’ banks to launder their ill-gotten money.
“The two audits that were commissioned verify that this bad press was unfair, unfounded and excessive,” Georgiades said. He added that Cypriot authorities would move to eliminate any loopholes that the audits had pinpointed.
Loans from federal credit unions are
currently capped at 18%
, though some qualifying short-term loans can go as high as 28% (plus a $20 fee). These numbers are
below the standard three-digit APRs you see on payday loans, but a small number of credit unions are still figuring out ways to hook customers up with these questionable, high-interest loans.
In 2010, the National Consumer Law Center alerted the National Credit Union Administration — the federal agency that regulates and charters credit unions — to 58 unions that were getting around the established usury cap, mostly by tacking on fees that weren’t technically part of the APR, or by referring account holders to payday lenders (or credit union service organizations) who use the unions’ name and brand (and presumably paying finders fees to the unions) in setting up loans that fall outside of the NCUA’s purview.
Following that 2010 report, 52 of the 58 credit unions put an end to the practice, but a small number of unions persist in making, or allowing their names to be involved in, short-term loans that charge triple-digit interest to borrowers.
“The vast majority of credit unions offer responsible loans to their members,” writes the NCLC in its letter [PDF] to NCUA Chair Debbie Matz. “Unfortunately, a few credit unions
threaten to taint the rest of the industry by offering predatory loans to their members.”
The NCLC says that one credit union in California has been making 14-day loans that advertise a 15% APR, but which also charge a $32 fee. When you add in that fee, the effective APR on the loan jumps to 223%.
Then there are five credit unions in Florida, all of which allow one payday lending operation to use their names when offering short-term loans with APRs of 269%, nearly 10 times the maximum interest rate the credit unions would have been able to get on similar loans.
You can see the full list of credit unions involved in making payday loans here.
As the NCLC points out, federal bank regulators recently began considering ways to further rein in predatory lending by federally insured and chartered banks. And the NCUA has previously advised its member institutions of the problems involved with offering payday loans.
“More needs to be done,” writes the NCLC. “NCUA has clear authority to stop predatory lending by credit unions. When manipulation of the APR by federal credit unions is the problem, NCUA should use its authority under the Federal Credit Union Act and the Federal Trade Commission Act to forbid FCUs from evading the FCUA 18% usury cap by charging
fees that vastly outstrip the finance charge and that manipulate the APR.”
As for those credit unions that allow payday lenders to use the union’s name when making high-interest loans, the NCLC suggests that regulators should refine the NCUA’s finder’s fee rule to ensure that credit unions “are not incurring third party risk and profiting off of loans that are illegal for them to make directly.”
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MoreMay 16th, 2013 | Tags: cashwoe, cfpb, consumer, king, national, payday loans, place, trade | Category: payday loans, Uncategorized | Comments are closed
In 2010, while peeling back the layers of Hialeah’s “shadow banking’’ industry, federal prosecutors pressed the city’s mayor about allegations that he had collected exorbitant cash interest payments on more than $1 million in loans he made to friends and acquaintances.
Julio Robaina’s answer? Not true.
On Thursday, Robaina’s words came back to haunt him, when a federal grand jury indicted him and his wife on charges of conspiring to evade income taxes, making loans at sky-high interest rates, failing to report secret cash payments — and lying to federal authorities.
He made the statements at issue in August 2010, while preparing an unsuccessful run to become Miami-Dade County mayor.
Robaina, 47, and his wife Raiza Villacis Robaina, 39, who operated two loan companies, are accused of receiving the undisclosed cash payments as interest on the personal loans they made to friends, including convicted Ponzi schemer Luis Felipe Perez. The loans were doled out as part of an informal banking system operating below the radar in Hialeah.
The indictment alleges the couple tried “to enrich themselves by concealing, disguising and failing to report the true and correct amount of their income to the Internal Revenue Service.”
Husband and wife, scheduled to surrender to authorities and have their initial court appearance Friday, proclaimed their innocence through Julio Robaina’s defense attorney.
“Obviously, both Mr. and Mrs. Robaina are disappointed by today’s news,” said attorney David Garvin. “However, they look forward to having their day in court.
“They are anxious to clear their good names,” he added. “We are confident that they will prevail and will ultimately be vindicated.”
In addition to tax evasion, both Robainas were indicted on charges of filing false tax returns that understated their income. According to an indictment, the couple’s reported income swung wildly from a loss of $62,015 in 2006 to a gain of $1,023, 672 in 2007, when they knew their “total income was greater than reported” in both years.
The indictment also accused the couple of lying to federal agents. Robaina is charged with making a “false statement” in August 2010, when he told IRS agents that he had “no involvement” in his wife’s loan businesses, MR Holdings and RVR Holdings, when the defendant knew “he had negotiated and agreed to the terms of the loans made” by those companies, the document states.
He also is charged with making another false statement to agents that month when he said “he never received cash interest payments from L.F.P., when in truth and in fact, the defendant knew he had received cash interest payments from L.F.P” — a reference to Ponzi schemer Luis Felipe Perez.
Robaina’s wife is charged with making a false statement to agents in September 2010, when she said her husband had “no involvement” in the operations of the loan companies in her name.
In Hialeah, reaction to the indictment was varied.
Former Hialeah Mayor Julio Martinez said the indictment was a long time coming.
“To have a mayor who is also a money-lender didn’t look good for this city. He had no need to be doing that, considering that he made more than $270,000 per year in salary and perks,” Martinez said. [...]
In 2010, while peeling back the layers of Hialeah?s ?shadow banking?? industry, federal prosecutors pressed the city?s mayor about allegations that he had collected exorbitant cash interest payments on more than $1 million in loans he made to friends and acquaintances.
Julio Robaina?s answer? Not true.
On Thursday, Robaina?s words came back to haunt him, when a federal grand jury indicted him and his wife on charges of conspiring to evade income taxes, making loans at sky-high interest rates, failing to report secret cash payments ? and lying to federal authorities.
He made the statements at issue in August 2010, while preparing an unsuccessful run to become Miami-Dade County mayor.
Robaina, 48, and his wife Raiza Villacis Robaina, 39, who operated two loan companies, are accused of receiving the undisclosed cash payments as interest on the personal loans they made to friends, including convicted Ponzi schemer Luis Felipe Perez. The loans were doled out as part of an informal banking system operating below the radar in Hialeah.
The indictment alleges the couple tried ?to enrich themselves by concealing, disguising and failing to report the true and correct amount of their income to the Internal Revenue Service.?
Husband and wife surrendered to authorities early Friday and made their initial court appearance later in the day, before U.S. Magistrate Judge Andrea Simonton.
Julio Robainas got a $250,000 personal surety bond; is wife a $100,000 bond. They will be released Friday afternoon and their arraignment is set for next Friday.
The Robainas were shackled at ankles and wrists.
They proclaimed their innocence through Julio Robaina?s defense attorney on Thursday.
?Obviously, both Mr. and Mrs. Robaina are disappointed by today?s news,? said attorney David Garvin. ?However, they look forward to having their day in court.
?They are anxious to clear their good names,? he added. ?We are confident that they will prevail and will ultimately be vindicated.?
In addition to tax evasion, both Robainas were indicted on charges of filing false tax returns that understated their income. According to an indictment, the couple?s reported income swung wildly from a loss of $62,015 in 2006 to a gain of $1,023,?672 in 2007, when they knew their ?total income was greater than reported? in both years.
The indictment also accused the couple of lying to federal agents. Robaina is charged with making a ?false statement? in August 2010, when he told IRS agents that he had ?no involvement? in his wife?s loan businesses, MR Holdings and RVR Holdings, when the defendant knew ?he had negotiated and agreed to the terms of the loans made? by those companies, the document states.
He also is charged with making another false statement to agents that month when he said ?he never received cash interest payments from L.F.P., when in truth and in fact, the defendant knew he had received cash interest payments from L.F.P? ? a reference to Ponzi schemer Luis Felipe Perez.
Robaina?s wife is charged with making a false statement to agents in September 2010, when she said her husband had ?no involvement? in the operations of the loan companies in her name.
In Hialeah, reaction to the indictment was varied. [...]