Payday lending offices will close
By Turner Walston
Published in News on March 2, 2006 2:29 PM
The three payday lenders that agreed to stop doing business in North Carolina all operate offices in Goldsboro.
A representative at the Goldsboro Check Into Cash had no comment on Wednesday's agreement reached between the businesses and the state Attorney General's office. Telephone calls to local branches of Check 'n Go and First American Cash Advance, the other two businesses involved, were not answered today.
Check Into Cash, Check 'n Go and First American Cash Advance all have offices near Seymour Johnson Air Force Base. Studies have shown that a high concentration of payday lending offices are located near military bases.
Greg O'Donoghue, community readiness consultant with the Family Support Center at Seymour Johnson Air Force Base, said he was pleased with the agreement.
"I have been working aggressively to keep people out of their clutches," O'Donoghue said of payday lenders.
"I do not know numbers, but I do know for a fact that a sizable number of young people, and some of them not so young, have felt a need and have gone to the check cashing people outside the gates and have received short-term loans and paid an inordinate amount of interest."
O'Donoghue said the payday lending was a bad deal for customers looking for a quick fix.
"They pay 391 percent interest for the very first check, and then they interest rate goes up when the person realizes that check may not clear on payday," he said.
"What they end up doing is rolling it over from payday to payday for a period of time, and each time they roll it over they give up a considerable size of interest."
O'Donoghue said he and base personnel consider predatory lending a "readiness issue," that can distract military members from their mission. "Sometimes the people are overly concerned with how they're doing financially," he said.
"Moving them out or making them illegal is certainly going to take away a huge temptation for an immediate gratification, and sometimes for valid deeds when people just go to the wrong people," he said of the lenders.
O'Donoghue says he conducts a financial management class for first-term airmen at the base, and makes sure to warn them of predatory lending.
"I believe that we can help them sidestep them, or probably convince them not to go," he said.
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