Email, Ann Baddour, senior policy analyst, Texas Appleseed, Jan. 3, 2014
First, though CashNetUSA operations are based out of Chicago, it is a fully-owned subsidiary of Cash America. It now falls under the company name Enova International, Inc. Here is a link from the website that speaks to its relationship with Cash America: http://www.enova.com/additional-info/investor-relations/.
Second, the rates you cite for CashNetUSA and Cash America are consistent with what I shared with you. Those are the rates for a 14-day loan. The same charges apply if the term is shorter. The link I sent you regarding CashNetUSA states that, “Your loan will be due on your next payday that falls between 8 to 35 days away.” And, “Your Credit Access Business fee will be $25.00 per $100.00 borrowed. You will also be charged interest by your lender of 10.00% APR on loan principal and CAB fees.”
The information you have below reflects that $25/$100 charge for a 14-day loan. The rate over 1000% is for that same loan if the term is 8 days. The same applies to the shorter term loan for the Cash America storefront rate information (the $20/$100 charge).
Regarding the additional comments, I think what he is saying is very similar to what I have shared. However, I think it is important to note this particular statement, “By phone, Aguilar told me it’s his anecdotal impression...” We do not have sufficient data to know how prevalent 1000% plus APRs are in the market, but we know they exist.
We know and can document the following with the data that you and I have discussed: We know it is possible under the current regulatory schemes for these loans to carry 1000% plus APRs. We know, based on the OCCC quarterly data report, that for one quarter of 2012 the average APR reported for installment payday loans was in excess of 1000% APR; we also know that for shorter term loans (8 days appears to be the minimum loan term in the two cases cited below), the rates can exceed 1000% APR—including the rate disclosed on the Cash America-owned CashNetUSA website.
Please let me know if this explanation answers your questions.
In terms of other hard data, here is a link to a disclosure from a 5-payment bi-weekly loan by Ace Cash Express. If you look on the second page of the disclosure, the APR listed is over 900%: https://www.acecashexpress.com/~/media/Files/Installment/CAB/TX_InstallmentMultiplePayment600Example . It is not 1000%, but very close.