Sheriff’s Office seeks public’s help following Ceasars Head auto break

GREENVILLE, SC – The Greenville County Sheriff’s Office are seeking the publics assistance in helping to identify the man pictured here.

According to investigators, an auto break-in occurred near Ceasars Head State Park on May 21. Several bank cards and other items of value were stolen, and the victims stolen bank cards were then used at the Travelers Rest Wal-Mart.

Investigators ask anyone who may have information regarding this incident or who may recognize the man to call Crime Stoppers at 23-CRIME.


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If payday loans are horrible, what about federal student loans?

When I was researching payday loans, I came across an interesting statistic: Within three years of entering into repayment, 13.7 percent of federal student loans wind up in default.

So it made me wonder. What is the difference between payday loans and federal student loans?

The default rate for payday loans is considerably higher, but the economic stakes are vastly greater, in terms of dollars, for student loans.

A quick look at current direct federal loans in repayment shows an average balance of more than $26,000.

Even assuming that the average payday loan amount is $500, a high assumption, a single federal student loan borrower carries more than 52 times the burden of a payday borrower.

Look at the difference in marketing as well. Most Americans realize payday loans are a raw deal and a poor financial decision; thats why they have become a favorite political target. In stark contrast, student loans are accompanied with a narrative that you either take on a massive debt or your future will forever be compromised.

You dont have to like payday loansto see the similarities. Payday loans offer relatively small amounts of money in anticipation of a payday in the near future. Federal student loans permit students to take on massive amounts of debt in spite of the fact that many, if not most, are not working and have no immediate job prospects. In many instances they have a cosigner, like parents, on the hook as well.

If that werent enough, student loan debt is generally not discharged in bankruptcy unless repayment would create an undue hardship for the student borrower or his or her dependents.

It doesnt sound right. Does it? If there is outrage over payday loans keeping lower-income Americans on the debt cycle, why is nobody questioning federal student loans?

Politics.

A politician simply pointing out the math and potential hazards of student loans will be branded as denying access to education. Period. And thats not a political winner.

Federal student loans also create other types of problems. They drive upthe costs of higher education.

There are exactly two ways to control the costs of higher education for students: government fiat or market forces. State run higher education – Were talking free education in places like Germany – is fully funded by taxpayers at no cost to students. Most gainfully employed graduates will eventually feel the cost in the form of significantly higher taxes when they enter the workforce. Since we generally dont want the government to run even more of our lives in America, we dont do that.


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The Six-Minute Loan: How Kabbage Is Upending Small Business Lending — And …

This story appears in the May 25, 2015 issue of Forbes.

When Jennifer Kirk, who owns Posh Puppy Boutique, a pet grooming and supply shop in Rocklin, Calif., had an opportunity to expand her business last year, she turned first to her bank, which made her wait three weeks before rejecting her loan application. Then she learned about Kabbage, which let her apply online-linking directly to her bank, PayPal and QuickBooks accounts (as well as her social media feeds)-and then ran an automated program to assess her creditworthiness.

Six minutes later she had an answer: She was approved to borrow up to $50,000 on a six-month loan, and she could transfer part or all of those funds to her PayPal account whenever she needed them. “The money was instantly available to me,” says Kirk. But at a price-an annual percentage rate of about 27%.

Today Kabbage offers borrowers lines of credit for as much as $100,000, with loans payable over six months. The average line of credit is $25,000, and the average borrower takes seven or eight loans a year, totaling $50,000. Since its start in 2009, the company has lent more than $750 million to small businesses, and it expects to lend $1 billion in 2015. It also expects to be profitable this year, with revenue exceeding $100 million, up some 200%.

Those numbers put Kabbage among the leaders of the increasingly crowded field of alternative lenders, says Smittipon Srethapramote, a vice president at Morgan Stanley, who researched the space prior to the initial public offering of OnDeck, a Kabbage competitor. “It’s well-known that banks have pulled back from making loans to small businesses since the recession,” Srethapramote says. “Kabbage and other lenders have filled the void.” Not unlike Uber and Airbnb, they have created a largely unregulated industry that is making a lot of money.

The seeds of Kabbage, founded in 2008 and based in Atlanta, were sown by Rob Frohwein, an intellectual property lawyer. Now CEO, Frohwein saw how much data were becoming accessible via the cloud and that companies like eBay and PayPal were providing application programming interfaces, or APIs, that a lender could use to get real-time access to a business’ customer-transaction data. Kabbage, Frohwein says, put the two concepts together.

Before starting the company, he called Kathryn Petralia, who worked for a financial services firm and was an expert in credit and payments, and Marc Gorlin, a serial entrepreneur with venture capital connections. In 2009 the three cofounders created a plan to finance Kabbage with venture capital, but a road trip to California proved fruitless. Instead, they raised $500,000 by issuing a convertible note, and after hiring employees and leasing office space, they got $1.5 million from a group of 45 angel investors. They made their first 100 small-business loans in 2010. That December Kabbage closed its first venture round and has since developed relationships with Silicon Valley Bank, Victory Park Capital and now Guggenheim Partners to provide the capital it loans out.


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Good News on College Costs: Student Loan Rates to Drop Soon

In a rare bit of good news for students facing hefty college bills, interest rates on federal student loans are expected to head lower soon.

Rates on US student loans are on track to drop by half a percentage point for the upcoming academic year when they are reset in July. As tuition prices escalate, borrowers have racked up $1.2 trillion in student debt, mostly in federal loans.

The expected reset would mean a college student with the average $28,000 in federal loans could save about $800 over 10 years in the most popular loan program for undergraduates, called the Stafford, assuming rates stay constant, according to a government financial-aid calculator. Currently, borrowers pay 4.66 percent annually.


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Texas and Other States Crack Down on Predatory Payday Lenders: What This …

By Jocelyn Baird, NextAdvisor.com

Its no secret that the payday loan industry is rife with predatory payday lenders. Even lenders that arent inherently predatory still often use practices which leave borrowers stuck in a seemingly endless cycle of debt. This is a big deal, considering more than 12 million people in the US take advantage of payday loans every year. According to a 2013 study done by the Pew Research Center, the average payday loan borrower pays a shocking $520 in interest to borrow $375. People turn to payday loans when they feel as if there are no other options, and what seems like an easy way to get desperately needed cash immediately often turns into a crippling debt. Fortunately for borrowers across the country, many states are trying to take action and crack down on predatory payday lenders. At the forefront is Texas, a state with few regulations and a thriving payday loan industry.

How are states like Texas cracking down?

At present, 36 states allow some form of payday lending. Some states, like Colorado, have strict regulations, but many dont. Pews study found that 72 percent of payday loan borrowers want more regulation across the board, and a majority (81 percent) want more time to repay loans. Most payday loans are structured to require a lump-sum repayment in a short period of time. Borrowers who cant make the lump-sum payment have the option to refinance, but at a cost, which is how the debt cycle begins. Predatory payday lenders profit off of borrowers inability to pay the lump sum on time. One potential solution favored by many is installment payments, which would enable borrowers to repay the loan in a series of payments over time.

Currently, Texas legislators are considering three bills that would go a long way toward protecting its residents from predatory payday lenders. These bills, if passed, would put a limit on how often an unpaid loan can roll over or be refinanced (three times), make lenders ensure that a customer pays down the principle amount by at least 25 percent each time the loan is refinanced and, finally, create a state database to track lending. The database is something that other states have proposed, and it mainly affects brick-and-mortar lenders.

California is also working to crack down on predatory payday lenders online, seeking to prohibit lenders from gaining access to borrowers bank accounts. The ability to take money straight from a bank account puts borrowers at risk of being caught between a high interest loan they cant repay and overdraft fees when the lender tries to take the money from their account.

Is anything being done on a national level?

One of the biggest problems when it comes to fighting predatory payday lenders is that if one state makes it difficult for a service to operate, it can easily pick up and move to another. This is because states vary so much in their approach to regulation. Fortunately for borrowers across the country, the Consumer Financial Protection Bureau has recently proposed national regulations to help curb predatory lending practices. Some of these include requiring lenders to take steps to ensure borrowers can repay their loans, by way of setting rates and terms that are based on the borrowers actual ability to make payments, and restricting lenders from attempting to collect payments from individuals bank accounts.

What do crackdowns on predatory payday lenders mean for me?

Obviously, if you are someone who has ever relied on a payday loan or considered one, more regulations at state and national levels are going to benefit you. The aim of all of these regulations is to prevent predatory payday lenders from taking advantage of the financially vulnerable people who are more apt to use their products. Micro loans have the potential to be beneficial, if regulated properly. Lower interest rates and a limitation on how often loans can roll over would enable borrowers to repay them in a timely fashion and not sink further into a financial hole. However, many payday loan services count on the money made from people stuck in the debt cycle and arent going to take kindly to government efforts to stop them. Thats why its important that both brick-and-mortar and online lenders are targeted with these regulations.

You can learn more about payday loan services by following our payday loan blog.

This blog post originally appeared on NextAdvisor.com.


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Is your money being wasted at Connecticut colleges?

Going to college is pricey and getting pricier. ¬†Tuition across the state is rising 4.8 percent next year, a response to the state slashing millions from the Board of Regents’ budget.

Tuition has gone up steadily for at least the last five years, a cost comparable to similar colleges in the Northeast, say members of the Board of Regents.

A current employee at a community college provided the News 8 Investigators documents.

“It makes me sick to my stomach,” said the employee. “All the money they waste.”

He points to furniture costs at his building, Naugatuck Valley Community College, and others.

When the state put together a $200 million budget for the new Gateway Community College, the president’s office needed furniture. The presidential suite furniture cost more than $108,000, including a $14,000 desk for Gateway President Dorsey Kendrick.

“It has nothing to do with tuition money,” said Kendrick. “That’s a separate pot of money.”

It wasn’t the administrations’ choice, but a decision made by state officials to spend that much on furniture. Education Committee member and state Senator Dante Bartolomeo says the money could have been spent elsewhere.

“We should only be focusing on spending that directly impacts educating our students,” said Bartolomeo. “Whether that be faculty, professors, student facilities, but anything else at this time seems extravagant.”

Earlier this month, Bartolomeo helped pass a bill to keep the Middlesex Community College branch in Meriden open. Senate Bill 399 also will require any closures of higher education campus to receive legislative approval first.

The Naugatuck Valley Community College employee pointed to issues he sees across the campus, specifically a workout facility that was built initially for faculty use. That facility in the newly opened Technology Hall is now closed for all but a few “credit amp; non-credit classes.”

“Nobody can use it,” said the employee. “It doesn’t make sense. Get rid of the equipment and use it for school space.”

Dean of Administration James Troup said not enough people had signed up to use it, so the school closed it down.

“The revenue stream did not even come close to covering expenditures,” said Troup.

There are now renewed talks among student groups to get the facility reopened, but administration critics say the money spent on a gym closed to most students amp; faculty is a symptom of an even larger issue.

“The fiscal irresponsibility, the abuse of power is ridiculous. The waste of money is at an epidemic proportion,” said the employee.


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Private equity giants giving bridge loans to home flippers

Wall Street is deepening its investment in the housing sector, with an increasing number of major institutional investors now providing bridge loans to small-scale home flippers.

Colony Capital, Cerberus Capital and Blackstone Group are among the firms that have started making the loans to investors who buy homes and quickly sell them for a profit, a practice that is benefiting from rising prices, a shortage of inventory and limited new construction, according to Bloomberg News.

“It’s one of the few highly fragmented businesses left,” said Beth O’Brien, CEO of Colony’s lending business. “If someone can do it nationally at scale, it’s cheaper and better for the borrower.”

Bridge loans, which are backed by the real estate, give investors cash for home purchases and renovations with about a year to repay.

Blackstone plans to make $1 billion of these types of loans per year. [Bloomberg News]  Tess Hofmann


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Lawmakers Lend An Ear To Concerns Over Payday Loans

Lawmakers Lend An Ear To Concerns Over Payday Loans

Updated: Wednesday, April 29 2015, 03:46 PM CDT

by Eva Hershaw, The Texas Tribune

Lawmakers from both chambers gathered Wednesday to lend support to a range of bills that would limit the loan size and number of installments offered by payday and auto title lenders.

We have lost some ground, and that is why it is important to do this press conference today – we have a very unified front, said Sen. Rodney Ellis, D-Houston, standing alongside Sen. Royce West, D-Dallas, and state Rep. Tom Craddick, R-Midland. They have all filed bills aimed at regulating the payday and auto title loan industry. We have to put this back on the front burner, Ellis added.

The press conference came on the heels of two hearings where Senate and House committees considered bills aimed at regulating loans offered by payday and auto title lenders, collectively known as credit access businesses. While advocates of the bills have derided companies for what they consider to be predatory behavior, opponents have expressed hesitation to increase state involvement that would restrict business operations in the state.

It is a sad day in Texas when the no. 1 state in income and job creation is charging the highest rates on payday loans, Craddicksaid. From 2013 to 2014, Texans have paid $2.9 billion in fees for these very high-cost loans.

Earlier Wednesday, the House Committee on Investments and Financial Services considered House Bill 3047, authored by Craddick, which would create a statewide law similar to city ordinances already in place across the state. The proposed legislation would limit loans to 20 percent of the borrowers annual income, allow for only four installments without refinancing and require a 25 percent principal payment to be made with each installment.It would also create a database, overseen by theConsumer Credit Commissioner, which would collect lender and borrower data.

Such businesses pass cash along to the consumer with an often exorbitantfee, said J. Ross Lacy, a city councilman in Midland, testifying before the committee. This traps consumers into a debt cycle they can never recover from.

Midland, in the heart of Craddicks district, is one of 22 Texas cities that have passed ordinances limiting loans offered by payday and auto title lenders.After the ordinance went into effect, Lacy said that five of the 18 credit access businesses went out of business.

Under the current system, [these companies] seem to benefit more from a customers financial failure than from a consumers financial success, saidJoe Sanchez,AARP Texas associate state director for advocacy, adding that one in five borrowers in the state are over the age of 50.

Rob Norcross, spokesman for theConsumer Service Alliance of Texas, spoke in opposition to the bill. The way the city ordinances are structured, it would be good for some kinds of single-payment payday loans, he said. But the requirement that they split the loan into no more than four pieces, that is still going to be too much to pay back for some people.

While Norcross was the only person who testified against the bill in the morning session, several committee members expressed concerns with the legislation. State Rep.Giovanni Capriglionecalled the establishment of a database to be used by private and state entities intrusive, while implying that Lacy and the city of Midland were trying to impose their own model on the rest of the state.

Rep. Phil Stephensonquestioned whether or not the state should play the role of protecting people from themselves.

We have watched these products increase the time of service with the clients that we serve, saidKatherine von Haefen, senior program manager at the United Way of Greater Houston. Inevitably, these families will have a financial emergency and payday lenders pounce on the opportunity to trap these families.

You think they force families into borrowing money from them? asked state Rep. Dan Flynn. You dont really think anyone is pouncing on anyone.

Capriglioneadded that he lives near an intersection with a number of Starbucks, but that they were not responsible for his behavior. If I buy a $5 latte, thats on me, he said.

But for Janice Rivera, from Belton, the terms of the auto title loan she and her family took out were never made clear. I am one of the people who fell into the trap, she said, speaking before the committee. They said I misunderstood the 20 pages of paper they gave me and as of March of this year, we had paid $2,100 in fees and had still not paid off our original $1,500 loan.

On Tuesday, the Senate Committee on Business and Commerce considered Senate Bill 121, by West, which would establish income-based loan limits and limitations on refinancing. They also considered Senate Bill 92, by Ellis, which is a companion bill to the legislation filed by Craddick.

All bills are currently pending in committee.

This article originally appeared in The Texas Tribune at http://www.texastribune.org/2015/04/29/lawmakers-lend-ear-concerns-about-payday-loans/.

Lawmakers Lend An Ear To Concerns Over Payday Loans


Why to avoid payday loans; spring cleaning

Payday loans are death to your savings. If you use a payday loan, you will usually pay fees for five months to take care of the original loan. If you borrow against a paycheck you haven’t even gotten yet, you’re going in the wrong direction. Try a short-term loan with a credible bank instead. Never borrow against your car or home. It traps you into more debt. Financial hardship comes to us all, so prepare for hard times before they hit. Save 15 percent of each paycheck.

Herbal care for cats and dogs


How N.J. pension money financed the purchase of a ‘predatory’ lender

TRENTON Consumer advocates are calling for the state to divest itself from a private equity firm that used $50 million in New Jersey pension fund dollars to acquire a lending company tied to illegal debt collection tactics.

At issue is the states stake in a partnership formed by JLL Partners of New York, which used the proceeds to help fund its 2006 acquisition of ACE Cash Express — a Texas-based operator of check cashing stores that used false threats, intimidation, and harassing calls to bully borrowers of so-called payday loans, according to the federal Consumer Financial Protection Bureau.

The investment, while indirect, was challenged by Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, who wants the State Investment Council to get its money out of the partnership.

We dont want taxpayers dollars going to a predatory company that isnt even allowed to do business in New Jersey, she said.

Payday loans are barred in New Jersey under laws governing cashing of checks. A bill pending in the legislature would also classify such lending as a violation of the Consumer Fraud Act.

Last July, the CFPB took enforcement action against ACE Cash Express over its debt collection practices, citing its harassment and false threats of lawsuits or criminal prosecution to pressure overdue borrowers into taking out additional loans they could not afford.

Payday loans are often marketed to help people make it between paychecks, but are usually expensive, small-dollar loans that must be repaid in full in a short period of time, according to the CFPB. The agency noted a study it conducted last year that found four out of five payday loans were rolled over or renewed within 14 days, leading consumers to ultimately pay more in fees than the amount of money originally borrowed.

ACE agreed to provide $5 million in refunds and pay a $5 million penalty. But in the wake of the enforcement action, Salowe-Kaye questioned why New Jersey would put its pension funds into such a business.

Theres a reason payday lending is illegal in New Jersey, she said. Payday lenders prey on desperate borrowers living paycheck to paycheck, keeping them trapped in a devastating debt cycle payday after payday.

JLL Partners did not respond to calls or emails.

NO DIRECTION ON PORTFOLIO FUND INVESTMENTS

According to Joseph Perone, a spokesman for the Department of the Treasury, the state initially had not been aware that ACE Cash Express had been penalized, but said JLL Partners had informed the state the lending company had complied with the federal enforcement action.

Perone said the Division of Investment has invested as a limited partner in a number of private equity buyout funds such as JLL Partners.

In these particular funds, the division neither directs nor approves the companies in which these funds invest, explained Perone. Absent a specific law prohibiting investment in a specific company or industry, we would not exclude a particular investment from consideration.

Consumer rights attorney Adam Deutsch of Denbeaux Denbeaux in Westwood, however, called the state irresponsible in not vetting the investment more thoroughly.

I think there is a fundamental problem with the state investing in a company not allowed to do business in New Jersey, he said. And the reason they are not allowed to do business in New Jersey is that they charge exorbitant rates on short term loans that are damaging to the community.

Deutsch said there are plenty of legitimate businesses allowed to do business in New Jersey that provide similar, if not better, rates of return on their investment.

Salowe-Kaye, meanwhile, said reforms are needed in the way New Jerseys Pension Fund is managed. The state has been gradually increasing its stake in non-traditional investments, such as hedge funds and private equity funds. Officials have said the shift has paid off, with better investment returns for a fund that doles out $650 million to $700 million a month in pensions and benefits. But it has also led to increased fees. Last month, trustees of the Public Employees Retirement System vote to conduct a forensic audit after funds costs hit a new high last year.

Still, Salowe-Kaye said the JLL Partners investment raised questions about where those pension dollars were going.

Investments in predatory payday lending companies, when their entire business model is illegal in New Jersey is just one example of irresponsible management of the pension fund, she said.


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