New rules unlikely to affect Nevada lenders

Friday, March 4, 2005 | 5:07 a.m.

WEEKEND EDITION

March 5 - 6, 2005

Stock prices for ACE Cash Express and other major payday lenders tumbled last week after the Federal Deposit Insurance Corp. tightened regulations for lenders that partner with federally chartered banks. Those lenders are now prohibited from giving payday loans to individuals who have had another outstanding loan from them for three of the previous 12 months.

The order affects only 12 of the 5,200 federally chartered banks, and the FDIC will not name those banks under federal privacy guidelines. The Nevada Financial Institutions Division does not keep data on Nevada payday lenders that partner with federally chartered banks, Commissioner Carol Tidd said.

But FDIC spokesman David Barr in Washington said he believed the impact on payday lenders in Las Vegas would be minimal since Nevada is a state where payday lending is legal and loosely regulated.

"I would say that this will have minimal impact in Las Vegas because a lot of the payday lenders that partner with banks tend to be in states with more restrictive payday lending laws," Barr said.

The Consumer Federation of America, a consumer watchdog group in Washington, reported in July that 11 of the nation's 13 largest payday loan chains are partnered with federally insured banks. Three of those companies do business in Southern Nevada. They are Advance America (eight stores), ACE Cash Express (17 stores) and Check 'n' Go (six stores).

But the federation said those companies partner with banks only in certain states in order to avoid usury laws and small-loan laws. Nevada has no such laws.