A by-the-numbers look at payday lending

COLUMBIA, S.C. - A report released Wednesday gives a picture of payday lending in South Carolina, from January through December 2013. A 2009 law restricting the industry required the annual report, starting in 2010:

- 1 million: The number of payday loans taken out in 2013. That's 96,000 fewer than 2010.

- $402 million: Total amount of those loans, compared to $417.6 million in 2010.

- $60.4 million: Total fees collected from borrowers, compared to $62.2 million in 2010.

- 127,920: Number of people who took out at least one payday loan in 2013. That's 20,800 fewer than 2010.

- 14 percent: Percentage of those borrowers who took out just one loan last year, compared to 16 percent in 2010.

- 16 percent: Percentage who took out more than 12 loans, unchanged since 2010.

- 14,989: Borrowers who entered an extended payment plan, or 12 percent. That compares to 11 percent of borrowers in 2010.

- 9 days: The average time between the closing of one loan and opening of another. The 2010 average was 8 days.

- 338: Number of payday loans not paid and referred to collections, representing 0.03 percent. That's down from 1,274 loans in 2010.

Source: Veritec Solutions LLC, which operates the state database

COLUMBIA- House leaders say the latest payday lending report shows a 2009 state law stopped rampant abuse in the industry, but critics contend far too many people who can least afford it are still trapped in a cycle of debt.

Nearly 128,000 people took out more than 1 million payday loans in South Carolina last year, totaling $402 million. Borrowers collectively paid $60.4 million in fees, according to a report released Wednesday.

Before the law, the number of loans exceeded 4 million a year. The number of payday stores statewide has dropped from 1,100 to 324 last year, as the law effectively shut down lenders that were doling out multiple loans simultaneously.

"By putting in place regulations, we've stopped abuse and misuse that was so rampant," said Rep. Bill Sandifer, R-Seneca, chairman of the House Labor Commerce and Industry Committee.

The 2009 law limited the number of two-week loans to one at a time, up to $550 each, and created an online database to track them. Borrowers must wait at least one day between loans. Lenders must check the database to ensure customers don't have outstanding payday loans elsewhere. The law also allowed borrowers who can't repay to enter a fee-free extended payment plan.

The annual report based on the database shows half of all borrowers took out more than 10 payday loans last year. One percent - 1,620 people -took out at least 24. On average, people who paid off a loan wrote a check for another one nine days later.

Sen. Luke Rankin said that shows there's still a problem.

"Unfortunately, people are paying way too much for credit, and our state is sanctioning it," said Rankin, R-Conway. "People are being preyed upon. The profits on this are tremendous."

Payday lenders can charge $15 per $100 loaned. In 2009, borrowers paid total fees of about $144 million. An advocate for the poor said that means profits didn't drop nearly as much as total loans. Between 2009 and 2013, loans declined by 75 percent, while collective fees dropped 42 percent.

Payday lenders are "still making an awful lot of money," said Sue Berkowitz of the Appleseed Legal Justice Center. "We need to be looking at better ways to promote affordable credit that doesn't trap people in debt."

The 2009 law was a compromise, as many senators wanted to abolish the industry altogether. The Legislature passed it over the veto of former Gov. Mark Sanford, who argued consumers need access to loans. Rankin still believes the industry should be banned.

Legislators are not currently considering any legislation to do so. Industry supporters say it provides people a regulated way to get the cash they need, so they're not driven to options without protections.

"I think we took the lesser of the two evils," Sandifer said. "There is a niche market for this product, but the public didn't like the abuses of it. We've tried to land in the middle."

Previously, loans were capped at $300 each, but there was no limit on the number, so many borrowers wrote two checks at a time and then took out more loans when they couldn't pay those off.