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"It's an awesome
deal," says Donald David, a state highway worker from Scappoose
whose Oregon Technology Credit Union saved his bacon one month with
a salary payday loan advance when his family was hit with an
emergency car repair bill.
Like other state agencies, the Oregon Department of Transportation
pays its workers on the first of each month. But the month lasts
longer than the money for many people, including Davis, who needed
$375 to get his car fixed. And banks and most credit unions limit
their lending to larger amounts for longer terms.
Before discovering his credit union offered a more palatable
alternative, Davis checked at one of Oregon's 151 licensed
payday
loan storefronts to see about getting an advance on his next
paycheck.
"I was astounded," he said. "The (annual) interest rate worked out
to 392 percent." Oregonians paid through the nose for the speed and
convenience of the 550,000 loans that carried them to their next
paychecks in 2002. The loans amounted to $175 million in that year,
the latest statistics available show.
The shops charge $15 or $20 per $100 for their short-term
payday
loans, which works out to annual interest rates approaching 400
percent. Oregon is one of 17 states that allows lenders to charge
what they like without an interest-rate cap. Assuming $15 per $100,
state consumer finance regulators figure the
fast cash payday loan
places charged customers more than $26 million in interest in 2002.
Seeing a need among its own members, many of whom are paid by the
month and live paycheck to paycheck, First Fast Cash began its own
payday loan service last month at 15 percent interest. The program
was barely off the ground before 22 loans totaling $7,500 had been
made, reports Bob Cowin, chief operations officer.
Gov. Ned Kuloski urged other lenders to follow First Tech's lead to
help Oregonians who "find themselves stretched thin between
paychecks."
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