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51 S. C. L. Rev. 589 (1999-2000)
The Two-Tiered Consumer Financial Services Marketplace: The Fringe Banking System And Its Challenge to Current Thinking about the Role of Usury Laws in Today's Society

handle is hein.journals/sclr51 and id is 601 raw text is: THE Two-TIERED CONSUMER FINANCIAL SERVICES MARKETPLACE: THE FRINGE BANKING SYSTEM AND ITS CHALLENGE TO CURRENT THINKING ABOUT THE ROLE OF USURY LAWS IN TODAY'S SOCIETY LYNN DRYSDALE* KATHLEEN E. KEEST* I. INTRODUCTION: A STUDY AT THE INTERSECTION OF LAW, POLITICS, MORALITY AND ECONOMICS ................... 590 II. AN INTRODUCTION TO THE PLAYERS IN THE FRINGE BANKING SECTOR ............................................ 595 A. Check Cashers and Currency Exchanges ........... 596 B. Cash Advance Providers ........................ 597 1. Pawns, Auto-Title Pawns, and Title Loans . ........................ 597 2. Payday, Check, or Deferred Deposit Services Loans ....................... 600 3. The Debt-Treadmill: Roll Overs and Renewals ............................. 605 4. Collection Practices of Title Lenders and Payday Lenders ........................ 610 5. Refund Anticipation Loans (RALs) ......... 612 D. Installment Purchases: Rent-to-Own .............. 614 E. Risk and Profitability .......................... 616 * LynnDrysdale is a staffattomey with Jacksonville Area Legal Aid, Inc. and Florida Legal Services, Inc. She has been representing elderly, low-income, and working poor clients for twelve years andhas experience with consumerprotection litigation and legislative advocacy. ** Kathleen E. Keest is an Assistant Attorney General in Iowa and Deputy Administrator of the Iowa Consumer Credit Code. The opinions expressed herein are those of the authors and do not necessarily reflect those of the Attorney General of Iowa, nor of the Office of the Attorney General. Ms. Keest was previously a staff attorney with the National Consumer Law Center and has written extensively on consumer credit issues. She is a member of the American Bar Association's Consumer Financial Services Committee, and she chaired its Interest Rate Subcommittee from 1991 to1994. The authors thank Jean Ann Fox of the Consumer Federation of America and John P. Caskey of Swarthmore College for sharing their considerable stock of information. We also thank Creola Johnson of Ohio State University Law School for permission to refer to her work in progress, and Karen Hayes for production and research assistance. 589

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