1000 payday loan

Zestcash to Expand Web-based Loans Into More US States

Zestcash offers small, short-term loans that it says are less costly and more convenient than those offered by traditional "payday" lenders, so called because their loans must often be paid back on the borrower's next payday.

Co-founded in 2009 by former Google CIO Douglas Merrill and former Capital One Chief Customer Officer Shawn Budde, Zestcash lends money to customers in Utah, Idaho, South Dakota and Missouri, and plans to expand to four other states in the first quarter next year.

"We're right on the edge of a massive growth spurt," said Merrill, the company's CEO. He declined to disclose the new states but said they represent a larger potential customer base than the existing states.

Payday loans are usually sought by people who have bad credit and little or no cash reserves, to deal with emergency expenses such as health issues or car repairs.

Unlike companies that provide conventional, long-term loans for needs such as buying a home, payday lenders usually don't turn to credit bureaus to qualify their applicants. Most applicants have short, checkered credit histories, so payday lenders assume many clients will default and build those costs into their fees.

Zestcash, which started lending in 2010, uses technology to gather information about applicants and make better informed decisions about them. By doing so, it says, its customers have lower default rates, so Zestcash doesn't have to collect such big penalty fees.

Borrowers must pay back typical payday loans in two weeks, but Zestcash provides loans ranging from three months to eight months, Merrill said. Borrowers pay both principal and interest with each installment.

Zestcash says it's flexible with late payments. If borrowers request more time to pay, it tries to accommodate them, even allowing skipped and partial payments.

"As long as a borrower is in touch with us, we don't consider them in default and go to great lengths to work out a payment arrangement that works for them," he said.

Birmingham's payday lending moratorium set for vote, public ...

BIRMINGHAM, Alabama — The future growth of payday loan, title pawn and check-cashing businesses in Birmingham will be decided Tuesday when the Birmingham City Council votes on a proposed year-long moratorium.

The ordinance proposed by Councilwoman Lashunda Scales would ban any new title loan or payday loan businesses from opening for one year or until the city’s comprehensive plan is complete.

Representatives of the payday lending industry say the proposed restrictions are unneeded.

But Scales, who is chairwoman of the council’s Economic Development Committee, said Birmingham has been inundated with the businesses. “The law department has come up with an ordinance that will protect the citizens of Birmingham,” she said of the proposal, which has been revised since she first presented it two months ago. “With the law department’s official input, it answers all of the questions that council members had.”

The businesses’ negative impact is twofold, Scales said.

She said businesses offering short-term loans have high interest rates that keep financially strained customers trapped in a cycle of making interest-only payments.

Secondly, she said, the presence of too many of these businesses repel other commercial development.

“Our citizens deserve first-class businesses at an affordable price,” she said. “However, if you have a string of these kind of predatory lending agencies in those same communities, then the likelihood of those (other) businesses locating in that area is nonexistent.”

Scales said she has been contacted by representatives of AARP who support her ordinance.

“We’re talking about senior citizens and the working poor,” she said. “This is to be a voice for those who don’t have a voice.”

Industry response

However, industry officials said their industry provides a necessary service and is unfairly characterized.

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