Business Not Booming for Payday Lenders I

Payday lenders expecting a Christmas boom this year are instead finding little holiday spirit among their customers.
Several chains of stores operating in the Montgomery area say the annual spike in the final five or six weeks of the year didn't happen this year, reflecting a the results found in a survey conducted by Borrow Smart Alabama, an industry trade association.
The survey shows that more payday owners are reporting a decline in business this year, with about three times as many reporting a decline in December as reported an increase in lending.
Bill Smith, who owns Easy Money stores, said customers who turn to payday lenders are like everyone else this year and are cutting back.
That means using available funds for holiday purchases and not borrowing.
"Our customers are trying to do a cash Christmas this year," he said.
Smith, along with other owners, sees the end of the year as a chance to boost the bottom line. Borrow Smart's survey found that more than 92 percent of respondents said December's loan volume is heavier than other months in a normal year.
"Bottom line, our business is down year-over-year, and it seems to be getting worse in December," the association said of industry trends.
Other lenders reported much the same thing.
Charles Hunter, owner of The Money Store, and Bill Cross, of 1 Stop Cash, both said the holiday season has been flat at their locations.
"We didn't get the spike," he said. "We are off a little bit."
Hunter said his lending was about equal to 2007 and actually is a little better than the two previous months.
"November had everybody scared," he said. "Everybody was so cautious."
Smith said his customers are looking for ways to cut expenses, and Christmas gifts are one of the first places they start.
"They still want to buy for their kids," he said. "But maybe not for aunts, uncles and everybody else."
Payday loans, sometimes called cash advance loans, are short-term loans that charge high annual rates. Lenders insist that because the loans are of such short terms, it is unfair to com-pare their rates to traditional lenders.
In a typical transaction, the borrower writes a check to the lender, and the lender advances money on the check, which is to be deposited at a later date.