The number of payday lenders in Colorado during the calendar year 2010 fell 19 percent from 2009, to only 410 locations, according to a report from Colorado Attorney General John Suthers. And during the same time period, the number of payday loans issued fell 29 percent.
The report contained information on 288 lending companies making deferred deposit “payday” loans, small-installment loans and traditional supervised loans. The law governing payday loans changed on Aug. 11, 2010. Prior to the change, payday loans were limited by law to $500 or less that were due on the consumer’s next payday, typically in two weeks. Following Aug. 11, 2010, payday loans were limited by law to $500 or less with a six-month-minimum term. The new law also changed the fee structure for payday loans.
According to the report, small investment lenders lent a total of $863,159 in 2010 compared to $10 million in 2009. The number of loans decreased from 15,399 in 2009 to 2,257 in 2010.The average loans amount fell 41 percent from $649 in 2009 to $382 in 2010.
Individuals struggling to make ends meet should consider payday loans a last resort and not a regular way to make ends meet. Experts urge that every other avenue be exhausted, even securing short-term financial aid before resorting to these lenders, as the charges they place on their borrowings are “ridiculous”. Once these types of loan become a regular occurrence, people can quickly see themselves sliding deeper and deeper into debt.