Kansas City Area Taking the Lead in the Online Lending Industry

September 21, 2013
Kansas City Star 
payday lending news

At least six agencies within the U.S. government have launched a crackdown on Internet short-term lending, which is good news for low-income consumers hurt by high interest rates and fees, according to an editorial in the Kansas City Star. State authorities also are taking on the industry. Arkansas Attorney General Dustin McDaniel, for example, has sued three area residents and their companies for violating the state’s usury laws by making online loans to residents at annual interest rates that often top 500 percent. The Kansas City area, however, has been a haven for the online payday loan industry due to the availability of offices, country clubs, and wealthier churches that cultivate social and business networks. This provides the assistance, technical and legal advice, and investors that online short-term lenders need.

Kansas City and Johnson County addresses are often found on lists of contributors to a national political action committee affiliated with the Online Lenders Alliance, according to the database OpenSecrets.org. The alliance’s founder, Mark Curry, is from the Kansas City area and has been sued in several states for online lending practices that allegedly violate state laws. The editorial points out that the payday loan industry is inherently abusive and depends on "exorbitant fees and repeat customers." Rarely does a person manage to repay the loan in its original two-week window. The writers assert that the business needs uniform regulations and enforcement at the federal level and that better alternatives to payday loans are needed.

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