Rate Caps Cause Stores to Close

Posted On: July 22, 2010 at 12:21 p.m.

Filed Under: advance america cash advance

Across the country, but particularly in Arizona, cash advance companies are struggling to survive with new regulations forcing rate caps on personal loans. Advance America, a South Carolina-based company will be closing 47 stores as a result of new legislation: “The company said existing law permitting cash advances in Arizona, where it will close 47 centers, expired on June 30 and it concluded that an economically viable alternative product or service does not currently exist. [[ads]] It would also close about 75 other centers, including 55 in Washington and Colorado. The company expects to incur termination costs related to the closures of $2.8 million to $5 million. Spartanburg, South Carolina-based Advance America said Arizona operations’ gross profit was $1.5 million on revenue of about $3.7 million for the first quarter” (http://www.reuters.com/article/idUSSGE6680HS20100709). Of course, this is a heated topic. What do you think—are these rate caps benefiting the consumer, or are they just hurting industries and jobs?

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