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High-Interest 'Payday Loans' Trap Elderly, Disabled

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The Tampa Tribune

Published: February 13, 2008

One recent morning, dozens of elderly and disabled people gathered at Small Loans. Many had borrowed money from Small Loans and turned over their Social Security benefits to pay back the high-interest lender. Now they were waiting for their "allowance" - their monthly check, minus Small Loans' cut.

The crowd represents the newest twist for a fast-growing industry - lenders that make high-interest loans, often called "payday loans," that are secured by upcoming paychecks. Such lenders are increasingly targeting recipients of Social Security.

"These people always get paid, rain or shine," says William Harrod, a former manager of payday loan stores in suburban Virginia and Washington, D.C.

Business, Page 6

•An analysis of data from the U.S. Department of Housing and Urban Development shows many payday lenders are clustered around government-subsidized housing for seniors and the disabled.

•"This industry provides convenient access to small amounts of money," said Tommy Moore, executive vice president of a company that says it represents about 60 percent of payday loan stores.

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