Those who oppose the proposed capping of payday loans across the country are making their voices heard as they argue that instituting caps could be the death of the short term loan industry

Kelly Collien, the director of operations for a Wisconsin short-term advance sent a response on October 23 to an editorial from the Oshkosh, Wisconsin-based The Northwestern.com which praised local politicians” continued attempts to “work on behalf of the consumer” to cap payday loans at 36 percent.

One part that she took particular exception to was a quote from state House Speaker Mike Sheridan which labels users of short term loans ones who are severely in debt and unable to repay the loans they take out.

“Our customers are not unintelligent, ”unbanked” citizens as critics often claim. They are working citizens with active checking accounts, who simply fell into an unexpected financial crisis. We do not prey on those in need; we work hard to help them,” Collien said in the letter.

She added that politicians who are considering putting measures into place should think about employees who could be put out of work if the businesses stop becoming profitable and are forced to close, as well as those who won’t stand to benefit from receiving short term loans when in dire financial straits.

Homeowners who are in a tight financial situation may run into trouble when making essential home improvements or repairs while preparing for the winter.

A payday loan may enable homeowners to complete home repairs, such as replacing broken windows and tending to pipes so they don’t freeze, and may be able to help save some money to lower their energy bills as well.

An easy way for one to save on heating bills, which can sometime account for up to half of a family’s monthly expenses, is to search a house for leaks in walls and windows in order to keep heated air from escaping.

Replacing so-called “traditional” lightbulbs with compact fluorescent bulbs may also be an initially higher cost (they cost $10 each) but use only one quarter of the energy and last for an average of 10,000 hours, netting an average savings of $30-per-bulb, according to CNN.

“The reality of the new economy is that homeowners want to save money while maintaining the value and comfort of their homes,” said Mike Lawrence, vice president of Insulation Systems for Johns Manville. “There are economical and smart steps homeowners can take that will positively impact their monthly energy bills today and their home’s value tomorrow.”

The creation this week of a new consumer protection agency that will regulate many forms of consumer credit companies is coming under scrutiny from some who feel that too much power is being given to the agency.

On Thursday the House Financial Services Committee (HFSC) approved the formation of the Consumer Financial Protection Agency (CFPA), which would oversee and regulate consumer credit agencies, including ones that issue payday loans.

The bill, which passed by a 39-29 vote that fell largely along party lines, will draw its powers from a number of other federal departments and be able to write rules for the financial products under its control, including payday advances.

However, not all are pleased with the aspects of the CFPA. NPR also reported that many GOP members who criticized the agencies ability to set limits on fees and interest rates, which could potentially do great damage to short term loan businesses.

The passing of the bill comes as many expressed disapproval over the new agency. The Association of National Advertisers (ANA) sent to HFSC members before the vote saying that the new agency would damage the Federal Trade Commission’s regulation abilities, AxcessNews.com reported.

With rising food prices and continued economic instability, consumers who find themselves on a small budget can find themselves in a tight spot when at a market to feed their family.

However, the recession has given a rise in popularity of salvage markets, which take in extra products from supermarkets that either are not selling or may be slightly past their “Best By” dates and price them at extreme discounts for those who need to save money.

“We have a lot of customers who are really trying to stretch a dollar,” said Barbara Bazan, the co-owner of Michigan salvage grocer M&B Foods, the Grand Rapids Press reported.

Among the items that can be found at the grocer for heavily discounted prices were a 25-count stack of large paper cups with the AMC Theatres logo on them for 50 cents and 1 pound of Jimmy Dean pork sausages which was priced at $1.25 because the “freeze-by” date had passed.

Another solution for immediate money needs if funding is lacking may be a loan, which requires no collateral and has straightforward terms when compared to other available loans.

As politicians weigh the possibility of putting a cap on interest rates that could cut the profits of lenders who issue payday advances, experts are coming forward to stress the ramifications that a rate limit could have on those who are in need of short term loans to stay financially stable.

In response to a proposed plan in Virginia which would limit loan rates that payday loan lenders could implement, director of communications for the Center for Consumer Freedom Sarah Longwell responded to the Augusta Free Press Wednesday in a letter which indicated that rates would hurt consumers by forcing lenders to shut down.

“As payday lenders close their doors, their former customers are forced to resort to more expensive alternatives to make ends meet,” she added.

Longwell also referenced a 2008 New York Times Magazine article saying borrowers had a preference toward taking out payday loans because their conditions were simple and contained no surprises or hidden fees.

The letter came in response to a plan released last week by state Attorney General candidate Steve Shannon in which he called for increased restrictions on payday loans.

Cash America, a leading provider of specialty financial services, posted increased revenue totals for the first three quarters of 2009 and is optimistic that growth will continue into 2010.

The lender reported on Thursday that its total revenue for the first three quarters of 2009 was $796.6 million, a 6 percent increase over the $751 million generated in revenue during the same period in 2008.

While service reported that the $62.9 million it has produced in net income through the first three quarters of 2009 is only slightly less than the $64.8 million earned through the first three quarters of 2008, the company attributed the difference to a 4 percent decrease in cash advance fees in certain markets.

When speaking of the newly released figures, Cash America president and CEO Daniel R. Feehan was optimistic that year-over-year quarterly earnings growth would lead to Q4 2009 growth and would beat out 2008’s figures as well.

“Our pawn lending activities have continued to produce earnings growth throughout 2009 and in the third quarter we were able to add year over year growth in our cash advance business segment as our storefront business posted a successful third quarter, he said.

A new survey from Ernst & Young has determined that the pricing of payday loans is “fair and reasonable” and imposing rate caps would “cripple” the industry.

According to the survey, which was initiated by the Financial Service Centers of America (FiSCA), the average revenue accumulated by lenders for every $100 of multi-line payday loans was $15.26.

While the profit translates into an annual percentage rate (APR) of 397 percent, the study stated that an APR was an “inefficient and inappropriate tool” to use when gauging short term loans, and added that after the removal of various fixed costs, lenders profits averaged only $1.37 per $100.

In regard to various proposals currently being debated that could lower APRs to only 36 percent, the survey concluded that instituting such a cap would “render payday advances unprofitable, forcing all lenders to cease offering the product and creating a void in the marketplace.”

“[It] stands to reason that significantly reducing the fees that can be charged for offering such products, such as proposed in various pieces of legislation pending in Congress and in some state legislatures, will have a significant impact on the multi-line payday loan industry,” said Joseph Coleman, FiSCA’’s chairman.

Helping the environment and saving money are the main reasons behind a number of new programs being implemented by retail stores in time for the holiday season that are offering monetary rewards for consumers who bring in reusable bags instead of relying on paper or plastic.

While helping the environment will likely please many as an easy way to perform a good deed, the savings will likely please those who rely on payday loans to purchase food and medical supplies for their family.

CVS was the first to announce the implement its green savings initiative for members of its ExtraCare rewards program last week. After purchasing a 99 cent “Green Bag Tag” that can be attached to any reusable bags that customers can bring in to use instead of plastic bags, the stores will provide a $1 Extra Buck coupon for every fourth trip the customer makes with the bags.

“We reward customers for doing good things,” Melissa Studzinski, the pharmacy’s director of relationship marketing, told USA Today.

According to the Providence Journal, the program will be rolled out in many of its 7,000 stores in the next few weeks.

Looking to save its customers some money while reducing its usage of disposable plastic bags, Target announced its own green initiative as well on Monday. Beginning on November 1, 1,700 of the retail chain’’s locations will begin issuing a 5 cent discount for every reusable bag used by a customer to carry their items.

The economic downturn is forcing many to consider alternative means to stay afloat financially, from cash advances and payday loans to taking out second jobs. A new layaway program being implemented by Toys R Us may provide another avenue for those with limited financial options especially when looking for gifts for the holiday season.

The “Big Gift” program, which was announced on Tuesday, will be the retailer’s iteration of an in-store layaway program that allows customers to purchase larger holiday gifts like bikes, televisions, and dollhouses by paying them off over time.

Consumers who want to get started on their holiday shopping early and take advantage of the program can reserve the item they are going to buy with a down payment worth 20 percent of the product’’s price, taxes, and a $10 service charge. They will then have until December 6 to pay off the product in full.

“Through the ”Big Gift” layaway, gift-givers can make important holiday purchases early in the busy holiday season when selection is at its best, giving shoppers peace of mind that they have reserved the exact item at the top of a loved one’s wish list,” said Jerry Storch, chairman and CEO of the toy store chain.

Toys R Us joins other retailers, such as Sears and Wal-Mart, that are implementing layaway programs to cater to consumers who may be strapped for cash amid what many are predicting to be a restrained spending season.

At the holidays people long to be with their loved ones, but the economic downturn has made it difficult for some to make that trip which means a short term loan might be of the utmost importance.

However, one looking to catch a flight home with a limited budget must act quickly, as prices for airlines are unlikely to see a drop this season like they did last year.

According to Farecompare.com CEO Rick Seaney, airlines have already begun matching each other’’s price increases in preparation for the holiday season. In a post to his website last week, Seaney said an increase in fares of up to $16 roundtrip by American Airlines had quickly been matched by Continental, Southwest, Delta/Northwest, United, and US Airways.

Microsoft’s Bing Travel expert Joel Grus also felt that prices were likely to rise as the season progressed, particularly because of many airlines” decision to cut back on the number of flights this holiday season in order to save money.

“The likelihood of fares continuing to increase as we near the holiday season far outweighs the likelihood of fares dropping significantly,” said Grus in the company’s holiday fare forecast. “Particularly if a traveler has specific dates of travel, he should jump on the next good fare he sees.

However, Grus added that there were currently extremely good deals for holiday flights that had the potential to save hundreds of dollars if acted upon soon.