Email, Ann Baddour, senior policy analyst, Texas Appleseed, Jan. 3, 2014

3:33 p.m.

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.

Thanks,

Ann