Why the payday loan industry is declining in Missouri
In Missouri, home of some of the most relaxed consumer lending laws in the nation, the payday loan industry has been shrinking for years.
After the Legislature changed the state’s usury laws to allow high-interest, short term loans in the 1990s, storefronts began popping up across the state. By 2005, there were 1,335 licensed lenders operating.
Today, there are 653. The 1.62 million loans taken out last year, according to a recent state survey, was a little more than half of what it was 10 years before.
Part of that decline is simply a shift to different types of loans. Many payday lenders haven’t closed — they now focus on installment loans. Rather than a two-week, lump-sum payment period (which may be rolled over as many as six times), installment loans are paid back in chunks over four or more months, but can still carry triple-digit annual interest. The number of installment lenders (many of which still offer payday loans) more than tripled from 2005-2013, to 976.
Read more: http://www.stltoday.com/business/local/why-the-payday-loan-industry-is-declining-in-missouri/article_405e3164-6b9d-557f-b42b-67681317ffbe.html
