Thursday, Nov. 06, 2008

Advance America loses two state payday-lending votes

Voters in two states voted to restrict payday lending on Tuesday, a blow to Spartanburg-based Advance America, Cash Advance Centers — the nation’s largest payday lender.

Ohio voters approved a new payday lending law that cuts the annual percentage rate that lenders can charge to 28 percent and limits the number of loans customers can take to four per year. It is among the strictest laws in the country.

Arizona voters rejected extending that state’s existing payday laws beyond their scheduled expiration in July 2010.

In Ohio, Advance America CEO Ken Compton said in a statement that the company would work under the new rules at its 244 statewide locations, but could close some or all of its centers if the company cannot make enough money.

In Arizona, Advance America said it plans to work with the state legislature and officials to allow payday lending in some form after 2010.

Advance America has left several states that have passed bans or restrictive laws against short-term loans that critics say hurt borrowers with extremely high interest rates.

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