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Released: March 01, 2010

Payday lenders advance on unemployment checks

Source: Robert Faturechi, L.A.Times (Free Registration)

The payday loan industry has found a new and lucrative source of business: the unemployed.

Payday lenders, which typically provide workers with cash advances on their paychecks, are offering the same service to those covered by unemployment insurance.

No job? No problem. A typical unemployed Californian receiving $300 a week in benefits can walk into one of hundreds of storefront operations statewide and walk out with $255 well before that government check arrives—for a $45 fee. Annualized, that’s an interest rate of 459%.

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