Editorial: An unfair advantage

Wednesday, June 6, 2007 | 7:10 a.m.

F or the sake of convenience, Nevada Power Co. customers are able to pay their electricity bills at businesses other than Nevada Power, such as grocery and drug stores. But utility customers also can pay their bills at some payday lenders, which advocates for the poor say can make low-income customers more likely to seek financial help from the high-interest lenders.

A story by the Las Vegas Sun on Tuesday says that a report by the Boston-based National Consumer Law Center shows that people can pay their power bills at 21 Southern Nevada payday lenders, which issue high-interest, short-term loans to people who promise to pay the loans with future paychecks.

State and federal lawmakers have criticized payday lenders for predatory lending practices and sky-high interest rates that often plunge low-income people deeply into debt.

National Consumer Law Center advocates told Sun reporter Steve Kanigher that allowing those lenders to collect utility payments helps the lenders attract new customers from a pool of people who often are not financially equipped to handle such loans.

A Nevada Public Utilities Commission spokeswoman says state regulators do not have the authority to tell Nevada Power where its customers may pay their bills.

Nevada Power has a contract with Western Union, which is responsible for selecting the businesses at which customers can pay their power bills. "It's really not our business to manage our customers' financial affairs," a Nevada Power spokesman told the Sun.

Western Union officials told the Sun it chooses businesses for such payments based on where its customers "are already doing business," and that there is nothing wrong with using payday lenders as a payment location.

But there is plenty wrong with placing utility payment locations inside payday lenders that offer financially debilitating high-interest loans to people who already are struggling to make ends meet.

It is appalling that Nevada Power and state utility regulators aren't taking responsibility for where the power company's customers pay their power bills. Both do have such a responsibility, but they are failing to exercise it.