Atlantic City Press
Associated Press
CLEVELAND, Tenn. - It's a financier's dream: Lend money to workers 
with steady jobs and short-term cash problems- at up to 800 percent 
That vision is now a lucrative reality for a group of street corner 
bankers who have made "payday lending" one of the nation's fastest-
growing industries. A borrower writes a postdated check to the lender, 
to be cashed on the next payday, and walks out with the cash. The loan 
can be renewed as often as the borrowers likes. 
In less than a decade, payday lenders have created a new industry and 
overcome challenges by lawsuits and states that called their triple-
digit interest rates illegal. They've succeeded by redefining the word 
"loan" and persuading lawmakers in 19 states to exempt them from laws 
that limit interest rates. Now they're working on changing the law 
instates that still consider them outlaws. 
Janet Delaney found out how payday loans work when she needed $200 to 
pay her bills. 
A friend told the hospital food service worker about a new storefront 
loan office called "Check Into Cash." The store let her write a check 
she couldn't cover and gave her $200 on the spot. They agreed not to 
cash it until her next payday - for a $38 fee. 
     JCT: Amazingly, $38 fee on a $200 loan for at most 2 weeks and 
most likely less. Better than loansharking. 
When payday came, the $16,000-a-year worker didn't have $200 to spare. 
Fine, the payday lender said, pay another $38 and you're off the hook 
until next payday. A year later, she paid $1,220 in fees. And she 
still owed the $200. 
     JCT: So she paid 600% interest in a year and still owes the 
original loan. When I relayed this story to a well-to-do person, he 
sneered that she had to be an idiot to not forego present consumption 
to avoid this trap. I pointed out that it only took one instance where 
the children needed medicine or some other very good reason for her to 
be trapped into her local loanshark's grasp. It's really amazing how 
many such cold-hearted people there are. They're too rich to get into 
such difficulties but simply blame it on stupidity. 
"I had to write a check to pay my light bill, my phone bill. That's 
the way it went every two weeks," said Delaney, who lives with her 
daughter, son-in-law and new-born grand-daughter in a rented two-
bedroom apartment here. "I never dreamed it could get to be such a 
Fees like hers have created a profitable and fast-growing industry 
that didn't exist a year ago.  
     JCT: Actually, we've seen in David Astle's Babylonian Woe which 
we are studying at that this is exactly what 
loansharks did in ancient Athens. Payday loansharks. 
W. Allan Jones opened his first Check Into Cash office, the one 
Delaney visited, in 1993. Now he lends to the masses at 270 
storefronts from California to the Carolinas. His company had $21.4 
million in revenue in 1997 and is opening 15 stores a month. Now he's 
preparing to sell shares in his company, the first stand-alone payday 
lender to go public. 
"People are willing to pay for convenience," Jones said. "I'm just 
lucky. I hit on something that's very popular with consumers." His is 
the most dramatic of many stories of new-found wealth made on payday 
The number of check-cashing outlets - many of which offer payday loans 
- has doubled to 6,000 since 1990, according to National Check Cashers 
Association. Another 2,000 offices do nothing but payday loans, said 
Bob Rochford, deputy counsel for the association. One of them, Advance 
America Cash Centers, was founded by former Blockbuster Entertainment 
executive George D. Johnson, who has expanded the chain to nearly 500 
"There's an obvious need," Rochford said, " and it is a very popular 
     JCT: It's like a guy selling water in a desert. It's a very 
popular service. The fact you starve or die if you don' get this 
service is rarely mentioned. 
     They keep calling it a service which is one reason I keep 
insisting that LETS interest-free bank accounts should be operated 
like utilities. 
The burgeoning industry has its epicenter in the unlikely Appalachian 
town of Cleveland, Tenn., home of two of the nation's largest payday 
lenders, Jones' Check Into Cash and rival National Cash Advance. 
Cleveland, population 30,000, is wedged between the hills of rural 
Tennessee, where downtown shoppers say hello, drivers leave the keys 
in their cars, and local mogul Jones invites that whole town to his 
annual Halloween Party. 
     JCT: How fitting that they'd dress up as the monsters and ghouls 
that they are. 
Along a five-mile stretch of Keith St., past the roadside church sign 
that says "God is God and he don't ever change," is where most of the 
town's 15 storefront payday lenders operate. Many bear stylish neon 
signs and look like auto rental agencies. Others, sometimes next door, 
are no more than a carpeted storefront and desk. They prosper on the 
short-term money troubles endemic to the blue-collar machine operators 
who  keep the town's Coca-Cola, Maytag and Rubbermaid plants running. 
     JCT: History has proven that there's no business as profitable as 
taking advantage of the poor.
A number of Cleveland-area borrowers banded together and filed a 
class-action lawsuit against Check Into Cash. It cost the company $2.2 
million to settle last year. More than a dozen class-action suits 
against payday lenders in Tennessee, Kentucky, Alabama, and Florida 
are ongoing. By the time he settled with borrowers in Tennessee, Jones 
and his colleagues had already persuaded state legislators to pass a 
1997 law permitting payday lending, with some limits. Along the way, 
he made more than $23,000 in political donations. Since 1990, payday 
lenders have persuaded lawmakers in 19 states to change the law to 
exempt them from limits on interest rates. "It is due in part to 
lobbying by members of our organization," Richford said. Another 13 
states including New Jersey allow payday loans by setting no limits on 
rates, or in the case of Indiana, by setting a maximum annual rate but 
allowing a $33 per loan finance charge. The remaining 18 states and 
the District of Columbia have "usury" laws that cap interest charges 
with no payday loan exemptions - at rates ranging from 17 percent a 
year in Arkansas to 47.68% in Georgia.
     JCT: And as David Astle points out, loansharks always need the 
approbation of the government and always go straight for government 
influence. Here's another example. 
Payday lenders are now trying to change the law in those states. We're 
going to be talking to some other legislatures about looking at that," 
said Sam Choate, general counsel of Check Into Cash. "We think that 
Virginia, for example, is a place where the market is being 
underserved." Underserved, perhaps, but not unserved. Because 
federally chartered banks aren't bound by state laws, they can offer 
payday loans even in states that ban them. Eagle National Bank of 
Upper Darby, Pa.,for instance, makes payday loans in Virginia through 
its Dollar Financial Group, which outlaws loans over an annual 
percentage rate of 36 percent. Some payday lenders that are bound by 
state laws do business in states with usury laws. Their reasoning 
rests on a hairsplitting definition of "interest." When lenders linked 
with the Gambino family Mafia charged 3 to 5 percent per week for 
illegal loans made out of a South Florida check cashing office, no one 
argued that it wasn't interest. Payday lenders call their charges 
"fees," not interest. Therefore, they reason, the charges don't 
violate state interest rate caps. 
     JCT: So all they have to do is call their usury a "fee" and 
that's enough for the lawmakers. 
Although they lend smaller sums than loansharks - usually $100 to $500 
- payday lenders often charge similar amounts. A typical rate, 20 
percent every two weeks, adds up to an annual percentage rate of 520 
percent for borrowers who keep renewing their loans. "The interest 
rates charged by these people would make the Gambino family blush," 
said Birmingham, Ala., lawyer Lang Clark, who has reached tentative 
settlements with several Alabama payday lenders in recent weeks. 
Redefining interest hasn't always worked. The attorneys general of 
several of the 18 states with usury laws - including Alabama, Georgia, 
Michigan, Pennsylvania and Virginia - have declared payday loans 
illegal. The new spate of laws in states like Tennessee that 
specifically allow payday lending, typically require lenders to 
disclose APR and set limits on rates and loan renewals. In Tennessee, 
for example, the maximum rate is 15 percent every two weeks or 390 
percent APR. Check Into Cash lowered its rate in the state after the 
law was passed. Payday lenders argue that APR is a poor measure of 
payday loans because most borrowers repay them in weeks, not years. 
The average loan in Colorado was for 17 days and only 58,000 of the 
374,477 payday loans made last year were renewed, according to state 
figures. "We have never been able to identify a consumer who paid 400 
percent interest," said Gerald Goldman, general counsel for the 
National Check Cashers Association. 
     JCT: And yet, despite all their efforts to identify someone who 
had paid 400 percent, the reporter managed to find Janet Delaney 
who had paid over 600 percent with little difficulty. Just goes to 
show that when the guy who is looking has his eyes closed, he usually 
finds no evidence. "No evidence" is the key phrase. Whenever you hear 
that they have found "no evidence" of evil, just remember that there's 
always the good chance they've could have had their eyes closed. 
Dear Ann: 
I am writing about something that happened in our town not long ago. A 
woman was killed in her own home by her husband. The woman had 
neighbors who heard her scream for help but they chose not to become 
involved. This will haunt them forever knowing they might have saved 
her life and instead did nothing.
I have been in a similar situation. I was out in the street one night, 
trying to get away from my abusive husband. He had knocked me down and 
was pounding my head into the pavement. I was screaming for help, 
begging someone to call the police. No one came. After he left me 
alone, a woman came out of her house and said she "hoped we had 
resolved our problem."  
Fortunately, I survived and through Al-Anon, counseling and good 
friends, I finally got my life together. I know others who, like me, 
needed to be rescued but weren't because people "didn't want to get 
involved." When I hear about such incidents, it makes me angry. People 
need to help one another. Even if they call 911 and  it turns out to 
be a false alarm, so what? You never know when you might be saving a 
life. Please, tell your readers: Take a chance. Get involved. 
Santa Barbara, Calif.
There are times when MYOB (Mind Your Own Business) is the best policy 
but when someone is screaming for help is not one of those times. The 
next letter says it far better than I ever could:
Dear Ann: 
I recently saw this poem at work. The author is unknown but apparently 
she witnessed the death of her mother. I cried when I read it not only 
because of the pain I felt but because so many women out there need a 
wake-up call. Please print it so others might benefit from the 
D.R. in West Palm Beach, Fla. 
Here it is, poignant and powerful. Thank you for sending it: 
I got flowers today. It wasn't my birthday or any other special day.
We had our first argument last night and he said a lot of cruel things 
that really hurt me. I know he is sorry and didn't mean the things he 
said. Because he sent me flowers today.
I got flowers today. It wasn't our anniversary or any other special 
day. Last night, he threw me into a wall and started to choke me. It 
seemed like a nightmare. I couldn't believe it was real. I woke up 
this morning bruised all over. I know he must be sorry because he sent 
me flowers today.
I got flowers today and it wasn't Mother's Day or any other special 
day. Last night, he beat me up again. And it was much worse than all 
the other times. If I leave him, what will I do? How will I take care 
of my kids? What about money? I'm afraid of him and scared to leave... 
But I know he must be sorry because he sent me flowers today.
I got flowers today. Today was a very special day. It was the day of 
my funeral. Last night, he killed me. He beat me to death. If only I 
had gathered enough courage and strength to leave him, I would not 
have gotten flowers today. 
     JCT: And there it is once again. The reason the dead lady 
couldn't leave her situation was: "what will I do? How will I take 
care of my kids? What about money?"
     Once everyone has their own interest-free LETS credit card, both 
the mother and the kids, these kinds of situations cannot arise. So 
again, you can see why I place these kinds of "underfunding" deaths on 
the doorsteps of the bankers who denied this lady and her family the 
credit they needed to survive until the kids were trained and both 
they and their mother could come on line and pay back the credit used. 
Associated Press
by Joan Loviglio
PHILADELPHIA - Homeless advocates lay down in the sidewalks along a 
busy shopping district yesterday to protest a new ordinance allowing 
police to fine and in some cases remove vagrants sitting or living on 
city sidewalks. 
The "sidewalk behavior" ordinance also offers more shelter beds, 
mental-health programs and substance-abuse counseling. But what has 
made the law so contentious is a provision that outlaws lying or 
sitting on the sidewalks. 
     JCT: Again we have politicians who, not realizing that the lack 
of funds is caused by unsafe engineering of the bank software, try to 
find ways of getting rid of the victims, not be eliminating the 
banking function which victimizes them but by jailing or chasing away 
the victims. 
Associated Press
CAPETOWN - A 6-month-old puppy was recovering yesterday from a six-
hour heart operation performed by surgeons more familiar with two-
legged patients. Milo, a brown and white Jack Russell terrier, had 
defects in all four chambers of his heart - a potential fatal 
condition more commonly found in children and corrected at 9 months to 
3 years old. "We've generally adapted the operation to the anatomy of 
the dog which is slightly different from humans," said Dr. Johan Brink 
of the University of Cape Town Medical School.
     JCT: Typical in a world run under a usury banking is that the 
pets of the rich have more credit and deserve more care than the poor. 
I'm sure that there are thousands, maybe hundreds of thousands of 
needy poor in South Africa and yet scarce resources are spent on an 
animal. Can there be any greater indictment of the banking system 
which deprives people of credit while providing more than necessary to 
some so that they their pets rate better service than their neighbors? 
Philadelphia Daily News
by Mensah M. Dean (
On March 3, thousands of Philadelphia families could lose their 
welfare benefits because of reforms in the law. Area clergy are 
praying that won't come to pass, but they've also sent Gov. Ridge a 
letter recommending ways to avoid cutoffs. Among the signers are the 
bishops of the Evangelical Lutheran, United Methodist, Episcopal 
Churches. Cardinal Anthony Bevilacqua also signed. "We are in 
agreement with the basic goals of the law and recognize the clear need 
for reform toward fostering greater responsibility and accountability 
and building into the system incentives for self-sufficiency. But we 
believe that insufficient attention has been given to the measures 
that will move people from welfare to family sustaining employment." 
     JCT: Even though robots are here to do all the work, people are 
still being punished for not having found work. Real Caoutte's make-
work program would appeal to these Philadelphia politicians. Take out 
the bulldozer and put in 50 people with shovels. If they want to 
provide even more work, take away their shovels and give them spoons. 
     Actually, the real reason is that they have to make getting free 
money so onerous, people are deterred from trying to get some. The 
only time getting free money for doing nothing is acceptable is for 
rich people receiving dividends. Remember, rich people who do no work 
are just as parasitic and useless as the unemployed, the only 
difference being that the money they receive is called a different 
As of yesterday, the clergy had received no response. 
Though welfare reform kicked in statewide on March 3, 1997, most 
recipients won't start feeling it until this March when thousands 
could see their benefits terminated for failure to meet new work 
requirements. With few exceptions, those who have received welfare for 
24 months must work at least 20 hours a week to keep their benefits. 
In Philadelphia, some 21,000 recipients face benefit termination. 
The clergy, along with other advocates for the poor, view this as 
unfair to children in these households. They say many welfare 
recipients face enormous challenges in finding employment. "When you 
don't have a work history, you don't have a GED, when there has been 
domestic violence in the home, a lack of transportation, these are 
barriers that need to be overcome and addressed." 
     JCT: They always seem to have to answer to "What should be 
addressed" but never have the solution of how to address it. What's 
funny is that though Christ's message was "Good news for the poor," 
these preachers certainly don't have any good news for the poor unless 
you consider complaining about their lot "good news." Then again, what 
would you expect from preachers who don't even realize that Christ's 
mission was to free the poor from their debt slavery by abolishing 
interest and who almost to a man (or woman) collect interest for 
themselves and their flocks despite Christ's prohibition:  "If you 
have money, do not lend it out at interest." (Thomas 95) 
The clergy group recommended that the state make sure people have 
enough literacy and life skills to enter the job market; that benefits 
to children be continued even if their parents are cut off; and that 
the state expand the definition of work to include education and 
     JCT: Sure, keep giving benefits to the kids while cutting off the 
parents. I'd really be interested in seeing how they manage that. Do 
they think that the parents won't use some of that money to eat too? 
That only the kids will eat and the parents will dutifully starve? And 
notice that all the things they suggest be done cost money and the 
standard answer is "there is no money" for which they sit back 
thinking that though their suggestions can't be accomplished, they did 
their share by suggesting it no matter that it couldn't be done. 
But changes are unlikely, Ridge spokesman Tim Reeves said. He noted 
that families losing welfare benefits still get food stamps, and said 
that thousands of slots in state job training programs are empty. 
     JCT: I think the following editorial cartoon says it all:
Philadelphia Inquirer
Editorial Cartoon by Tony Auth
Caption: 14 million American kids live in poverty, 580,000 of them in 
Governor Ridge surrounded by many children one of which asks:
"The Federal Government's hung up on sex. What's your excuse?"
     JCT: How true. While the government's attention has been towards 
protecting children from sex on the Internet, they've ignored 
protecting them from hunger and poverty at home. Then again, I"m sure 
that Ridge will have the same politician's excuse that he had been 
conditioned to ignore their pleas because he couldn't find the 
monetary tokens. 
Philadelphia Inquirer
by John Timpane (
This is how it goes. 
You are Yvette Martinez of Camden, you are 25 and you have three 
children. You all live on $322 a week, the amount of your cash 
assistance. Child care alone costs $150 a week. It's tough to meet 
your monthly rent and utility payments. 
You're working as a receptionist at the offices of New Jersey Work 
First in Camden. It's part of a program called Community Work 
Experience (CWWWEP) - unpaid work-related activities in a real work 
setting. You're doing it as part of your welfare arrangement. 
You have to get all three kids up in the morning, get them ready and 
get them to the bus. If you miss it, the next one comes in a half-hour 
so the four of you end up walking. Two of the kids go to day-care and 
one goes to an at-home provider. The kids don't like it. They're cold 
and hate walking the long distances. 
Then you walk to your CWEP where you work five hours. Then it's off to 
get at least three "job-related contacts" or job interviews each day. 
("I have to have 15 by the end of the week," you say, showing me the  
form that tells your caseworker you're looking for work.) Then you 
have to round up the kids, get back home, make dinner and stare at 
figures that tell nothing adds up. 
The job search is not going well. "I haven't gotten anywhere," you 
say. "I've filled out a lot of job applications, and I've gone to a 
lot of companies. It's the kids."
Because most day cares close around 5, you can work until 4:30 at the 
latest and employers aren't interested in bending to fit your 
schedule. You say you "can't blame them all the way." 
Child care is a constant: a constant anxiety,a constant nightmare. 
Before the five-year cutoffs were established, you sometimes decided, 
uneasily, to go completely on welfare, just so you could stay home and 
be with the children. 
You want to work. "I've been desperately looking for jobs," you say. 
"My supervisor knows how hard I try." 
Again and again, what stands in the way is the  sheer logistics of 
putting a life together. If the  aim of the welfare changes was to get 
you to work hard to get a job, they've succeeded. "Sometimes it's hard 
to call prospective employers back," you say smiling at the paradox, 
"because I'm so busy looking for a job." It's fine for others to say 
"These women make bad choices," It's fine to ask: "Where is the 
father?" Say it; ask it. But whatever choices Yvette Martinez has 
made, she and her children have to survive now. And the man is out of 
the picture. He "helps with the bills," she says, but otherwise, "all 
the responsibility is on me." Should she get the law to bring him 
around? Maybe she would - if she weren't getting up before 6, getting 
three children into their clothes and down to the bus and, if she's 
lucky, not missing it, because it's 30 minutes to the next one and.... 
so on. As she speaks, sorrow and anger swell in her eyes but I don't 
see much self-pity. She looks good: pretty and presentable. She hates 
working at an unpaid position. "I guess at least you get experience 
and skills to put on your resume," she says. She knows the cut-offs 
are coming Feb. 1 in New Jersey. She wants something better. I accept 
many of the changes in the welfare law. Caps on benefits? fine. Firm 
deadlines? Great. Personal responsibility? Yet bet. Three cheers for 
the dignity of work. For some people, that will do the trick. As we 
heard in Tuesday's State of the  Union address, our welfare rolls have 
been cut almost in half in the last six years. Wonderful. 
     JCT: Again we see that the rationale behind making welfare 
mothers work is only to tell the tax-paying rednecks that people who 
get free money are being punished for it. Unless of course, it's rich 
people getting dividends. With so many unemployed people on tap to do 
necessary work, what's the need to take welfare mothers out of the 
home and force them to work now. 
     With a LETS interest-free credit line, she could stay in her home 
and take care of her family all the while living on a Green credit 
line which can be repaid twenty five years down the line. Of course, 
the moment interest is charged on the credit, then the debt would grow 
too much over 25 years to ever be payable and so the credit for life-
support must be denied. But without interest, the loan would easily be 
payable by her and her brood. 
     The only thing standing between life-supporting credit for her 
and her family and no credit for food but miserly and punishable 
charity is the usury that the bankers inflict on our society.
But since such a large proportion of remaining recipients are single 
mothers with children - and is this anything new? - I am astonished 
that our lawmakers did not think things through a little better. We 
should be solving the catch-22s, not driving people into the teeth of 
them. But no, it's work vs. child care, child care vs. education, or 
education vs. work.
     JCT: Okay, we agree we should be solving the catch-22s. So what 
do we do next. Everyone agrees the present system is silly. This is of  
no use unless one can suggest an alternative. I've suggested a LETS 
account. Does anyone have any other suggestions? 
I cannot accept the idea that Yvette Martinez - and she is one of many 
- trekking all over Camden this winter with her three children, 
working at a gratis position, going on unpromising job interviews, 
strapped here, strapped there. I want to echo what King Lear says, 
stricken with shock that the poor suffer so much: We have taken too 
little care of this. 
     JCT: I agree but this is not enough. Anyone can point out flaws 
in the current system but who can suggest better alternatives? I have. 
Can anyone else? 
New Jersey Star Ledger
by Donna Leusner
New Jersey's welfare caseload continues to drop like a stone. 
Two years after the state told welfare recipients they had 24 months 
to get a job - or start training for one - nearly 40,000 families have 
left the welfare rolls, a drop of more than one-third.
The decline in welfare numbers is part of a larger national trend that 
most experts attribute to the booming economy as well as the get-a-job 
approach to new welfare rules. 
The official deadline comes tomorrow for thousands of welfare mothers 
across the state. Nearly 12,000 welfare mothers who are not meeting 
the work requirement are being called into county welfare agencies 
this month and told that their cash assistance will be cut of if they 
don't get a job, enroll in a training class or start a job search.
Natasha Levant, a 24-year-old Newark woman with three children is 
about to leave welfare after six years. Does she expect to ever have 
to rely on welfare again? "Hopefully with the grace of God, no. 
Honestly, you can't live off $389 a month. My rent is $300 a month. 
How can I feed three kids with $89 a month?" she said. 
     JCT: I just printed this piece to remind people what little 
welfare families have live on. I want you to consider how a family of 
four can live on $22 a week and then hear from the economists why this 
is necessary and from the richer people why it is proper. 

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