Payday Lenders Find New Market

In this down economy, many working people turn to payday lenders for advances on their paychecks — though they pay exorbitant fees. Now payday lenders have a new market of needy customers. The Los Angeles Times reports that some of these lenders are offering advances on people's unemployment checks.

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RENEE MONTAGNE, host:

And our last word in business today is cashing in.

In this down economy, many working people turn to payday lenders for advances on their paychecks, and they pay exorbitant fees. And now, payday lenders have a whole new market of needy customers.

This morning's Los Angeles Times report that some of these lenders are offering advances on people's unemployment checks. The math is painful. A jobless Californian, who can't wait for his $300 a week benefits check can go to a payday lender and get $255 upfront with the remaining $45 going to the lender as a fee.

One man interviewed by the Times says he had done this three times since losing his job six month ago. He's done the math and decided it's cheaper than paying late fees on his household bills.

And that's the Business News on MORNING EDITION from NPR News. I'm Renee Montagne.

STEVE INSKEEP, host:

And I'm Steve Inskeep.

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