Payday lenders borrow ideas to stay in business

SANDUSKY With glittering letters, the signs on the Perkins Avenue Cashland proclaim an enticing offe
Annie Zelm
May 24, 2010



With glittering letters, the signs on the Perkins Avenue Cashland proclaim an enticing offer.

Got gold? They'll buy it.

Need someone to do your taxes? Check.

They'll also help you transfer money, score a pre-paid Visa gift card and get a quote for car insurance.

As payday lending stores adjust to new regulations that eliminated their mainstay, they seem to be shifting their focus to becoming one-stop shops for a little of everything.

Yolanda Walker, spokeswoman for Cash America, the parent company of Cashland, said the chain is increasingly turning back to its roots as a pawn shop.

"We really wanted to keep as many of our shops open in Ohio as we could, so coming up with those different products has helped us," she said.

Marcella Olsen, manager of the Cashland on Perkins Avenue, said gold sales have been popular since the store started them just before the election.

"People come in daily," she said Friday evening. "We had five people come today."

The response was so great that the company created a separate Web site,, to process orders by mail. Though Cash America maintains its own jewelry center, it ships gold to a separate refinery and receives a percentage of the proceeds.

Other lenders, struggling to remain in business on the limited loans they can legally offer, are taking note.

Checksmart Financial CEO Ted Saunders said his company has already closed a string of stores in Ohio and may sell other products to stay in business.

"We're constantly evaluating whether or not this is going to make sense," Saunders said. "The new laws provide a few more complications. We're more cautious in our processes, (the loans) are harder to obtain, and there's more paperwork."

Ohio voters in November approved a law that capped the annual percentage rate payday lenders can charge to 28 percent and limited each customer to four loans per year.

But many stores are already offering alternatives such as mortgage loans or small loans through the Small Loan Act.

Under the Small Loan Act, lenders can charge a fee of $15 or 1 percent of the loan amount for loans of $500 or less.

Payday lenders formerly charged a flat fee of $15 for every $100 borrowed.

Advance America spokesman Jamie Fulmer said it's too early to tell whether such loans will be profitable enough to keep the doors open for about 245 stores they have in Ohio.

The company already offered other financial services such as MoneyGrams, pre-paid debit cards and check cashing. But in recent months, they've started doing tax preparation.

At Check 'n Go, spokesman Jeff Kursman said the company's pre-paid debit cards and check cashing are meager side dishes compared to the payday lending product that was its meat and potatoes for years.

"They add a little bit to the bottom line, but they don't make up for the product that has been lost," he said. "Whether it's enough to sustain the 50 percent of our stores that are still open in Ohio remains to be seen."

Longtime Cashland customer Linda Cawrse, 39, said she doesn't think the process of getting a short-term loan between paychecks has changed much. For that, the Bayside resident is thankful.

"I try not to get (a loan) unless I absolutely have to," she said, "but right now, with money the way it is, I really do need it."