TEMPLE — Because Chris Hill needed quick cash to help make ends meet, he took out a loan several months ago. Now he doesn’t even have enough money to buy food — thanks to his lender.

Hill has become yet another victim of payday lenders — companies that promise fast loans, but with a big price tag.

Typically, payday lenders will dangle several lures to draw in people who need money now: The loan can be approved in minutes, is deposited directly into the recipient’s bank account and is available even to people with bad credit.

However, Hill has discovered the downside of these loans, which includes high fees and interest rates — and more.

“It’s been a nightmare,” he said.

The company Hill used, Progressive Debt Relief, charged him a $25 fee for every $100 he borrowed. When Hill fell behind on monthly payments, the company, which required Hill to submit his bank account number before he could get any money, was able to draw the entire amount of the loan from Hill’s account.

“They cleaned me out,” he said.

Hill, a retired USDA worker who suffers from advanced muscular dystrophy and is wheelchair bound, lives in government-subsidized housing. At age 57, he struggles to meet his basic needs.

“I just bought him some food,” community activist Sue Hamby said.

Hill took out the loan because he needed money, but now he needs more because of the loan. “You get caught in a cycle. Once you get behind, it’s impossible to get out.”

The company has been calling him and pressuring him to take out another loan, Hill said.

Rucker Preston, director of Helping Hands, a Belton charity, said the organization offers programs that teach people about the pitfalls of payday loans.

The charity helps working class people who are caught up in the loans and have lost their homes and cars to companies that charge up to a 500 percent interest rate, he said.

The loan companies proliferate in Texas because state statutes regulating the companies are lax. These companies also have plenty of interest groups lobbying for them. In Washington, D.C., and some states in the Northeast, payday loans are illegal, but in states such as Texas and Utah, the loan companies are “wide open,” he said.

Because payday loan companies operate under state laws, cities that try to regulate them are hobbled, but not helpless. Cities can make opening a new company more difficult by requiring such businesses to obtain special permits.

The Temple CARE Leadership Network has scheduled a meeting at 7:30 a.m. Thursday to inform the community about payday lenders. Hamby, who helped organize the meeting, said she wants to find a way to shut the companies down. “I’m 76, and I don’t intend to go to my grave until I’m done with them.”

(3) comments


I'm very sorry for this person, but I can't understand how he could take such a loan with so big percents. I think you should at first calculate the possibility of paying back and then take some money. And the most guilt is on the lenders who give the loan without checking the solvency of the client. For example I found the service that gives payday loans Calgary. But it's remarkable that you can't take more money that you will be able to pay back. Everything is checked very carefully.


I’ve no doubt that a large percentage of payday loan customers don’t have too much complaint – people aren’t stupid, and the costs of payday lending are common knowledge…. I expect Wonga to enter the English language any time now, in a similar way to McJob. Take the money, pay it back, moan about how much it cost, repeat.

But what does this poor excuse for ‘research’ actually tell us? The fact that customers were treated “with dignity and respect” is meaningless. How is that defined? It can mean completely different things to a customer or a regulator and I suspect the ambiguity in the question is deliberate. Of course payday lenders treat you with dignity and respect when you’re borrowing from them… that’s just basic customer service. If they didn’t, people would just use a different payday lender.


If these guys are the only ones that will lend to you, you might be a high-risk borrower. Risk is directly proportionate to cost. No amount of zoning or legislation will ever change that.

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