Almost As Many PayDay Loan Centers As There Are McDonalds

There’s almost as many PayDay Loan Centers in America as there are McDonald’s.

PayDay Loan Centers: 22,000 (according to an estimate by the CFSA)
McDonalds: 30,000+
Starbucks: 8,836

The CFSA estimate is probably only the lower end, as probably not all of these places are dues paying members.

This isn’t the “fringe economy”, it is the economy. — BEN POPKEN

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  1. Hoss says:

    Guarenteed, you won’t find a traditional bank within walking distance of the cash cashing store in the picture. This place serves a purpose. If you think they’re sleazy operations, maybe they are, but count the charges that you pay on things like late payment fees, overdraft fees, tax refund advance fees, credit card advance fees and you’ll see that traditional financial institutions do the same crap.

  2. biggeek says:

    You need a valid SSN to open up a traditional bank account. Where do you think the 10 million illegals in this country cash their paychecks?

    It’s not coincidence that there’s a Western Union next door.

    http://www.westernunion.com/info/faqMTLocation.asp#tstfaq1

  3. lmedsker says:

    Biggeek- For what it’s worth, you must have an active checking account to take out a payday loan. So, 100% of payday loan customers do have a relationship with a bank or credit union, but choose to go to a payday lender anyway. I know my bank won’t loan $200 at a time, will yours?

  4. spanky says:

    As I understand it, many of those payday loan places are renting the charters of traditional banks.

    And why are traditional banks redlining in the first place? Why are they not opening regular branches and doing non-usurious business in poor neighborhoods?

    Because they can?

    I need to read more about this because I’m not entirely clear about the regulations and how they changed, but apparently, the Community Reinvestment Act has been pretty much cut off at the knees in recent years, so it’s even less enforceable than it was before.

    So regular banks are no longer required to comply with community banking regulations in any meaningful way, so they don’t open branches in poor neighborhoods; but then they turn around and invest in and profit from sleazy fringe banking institutions that open up to fill in the gaps left by the lack of real banks.

  5. Hoss says:

    There are plenty of US citizens using check cashing outlets — lots of them cash their gov’t checks there. Many immigrants (legal or not) don’t trust banks because of corruption in their home-country.

  6. kerry says:

    Hossofcourse -
    To add to that, many non-immigrant Americans are equally distrustful of banks, especially minorities who expect they won’t get fair treatment. I know a surprising number of people who function exclusively on cash and do all their banking at the currency exchange. One of those people even works at a bank.

  7. I know 3-4 people personally who hold white-collar jobs and yet do not have bank accounts. Now, two of them cash their paychecks like they do to keep the ex from wanting more than what they are allowed (or to cash a random check for side work). The other few just have no business wanting to deal with them.

  8. Sorenso says:

    Hmm, from those numbers we need more Starbucks! :)

    But honestly, I use these because of a mistake I made and it is so hard to get off them once you start.

  9. Panhandler says:

    Hi. Me again. Just want to defend myself from the comments on the other thread. Kerry, you slammed me because these places are ripoffs. Except, see, I AGREE with you. I am an attorney, and when I was in private practice I helped a couple of client untangle the sh*t these places, and other places like them (e.g., “mortgage” companies that offer ripoff equity loans), put my clients through.

    All I said, in the other thread, was that it’s not a surprise that these joints are disproportionately located in less affluent neighborhoods. That’s it. That’s all I said. I said it in a smartass way, admittedly, but it’s still true: Hot dog guys set up carts outside office buildings; these joints set up shop in less affluent neighborhoods.

    And they suck, yes. I’ll say it a hundred times. They suckedy suck suck. Okay? So let’s talk about state usury laws, then! The geography is just the free market. What’s the alternative? Lump paycheck places in with porno shops, and use local zoning ordinances to push them into industrial areas and that skeezy part of town out by the airport? It’s just not feasible. Or maybe it is? I dunno.

    In any event, I don’t get why I was slammed and even though I don’t know any of you, it’s been bugging me for 24 hours.

  10. Steven Francis says:

    Its a real and funny comparison. But the comparator should find out the reason for such a great number of payday loan provider. So many people everywhere are willing to go for that. reason is that they need instant help and in this recession time no one is there to help them. So they are heading towards these lenders. Though the intrest rate is very high but the immediate cash help can really work wonders for some.