Payday lender defends bill payment companies MLGW

The Memphis City Council wants to learn about Memphis, Light, Gas and Water’s use of ACE Cash Express to collect millions of bills over the past three years.

City Council is due to discuss MLGW’s use of pay stations such as ACE at its MLGW committee hearing on Tuesday. The hearing comes after The Commercial Appeal reported last week that the city-owned utility had raised $22 million from 30 ACE sites in Shelby County.

In response to the same article, ACE Cash Express’ parent company, Populus Financial Group, took issue with the National Consumer Law Center’s assertion that the company operates in the bill payment business as a means of driving traffic to its stores.

For subscribers:Why Payday Lenders Accept Millions in Payments MLGW: “It brings people into the store.”

“ACE has been in business for over 50 years and was processing bill payments long before we provided a short-term loan. In our experience, bill-paying customers and short-term lending customers are two distinct customer groups with minimal crossover,” Populus said in a statement.

“Utility customers should have multiple options for paying their bills. Removing convenient, economical choice does not serve the consumer. … The National Consumer Law Center is once again making claims that are more innuendo than fact,” Populus said. He provided a 2007 press release in which the company challenged a 2007 NCLC study that rated the hundreds of payday lenders across the country that accepted utility bills.

The company says the people who take out small-dollar loans at high interest rates at its Memphis stores are different from the thousands of people who pay their bills there. In some cases, ACE collects a fee for processing the transaction. In Tennessee, by state law, the only way to receive a loan from a payday lender is to take it out in person.

In an email on Saturday, Populus Financial Group’s Eric Norrington said: “97% of our customers did not receive a short-term loan when they visited or within 24 hours of visiting the store.”

The 2007 press release also made a similar distinction, saying that those who paid their bills at an ACE store almost never took out a loan – on the same day.

Populus also addressed MLGW bill payments made at a specific store mentioned in the CA article, one at 3109 S. Perkins Road, which is less than 100 yards from a Superlo grocery store where bills are also processed.

“Ninety-seven per cent of MLGW customers did not receive a short-term loan at the Perkins Road site,” ACE said.

Populus did not provide data on the number of bill payers who take out loans more than 24 hours before or after paying their MLGW bill.

Populus Financial Group is a private company and there is no way to verify the data it has provided to CA.

The city council hearing is scheduled for 11:10 a.m. Tuesday at Memphis City Hall.

Samuel Hardiman covers Memphis city government and politics for The Commercial Appeal. He can be reached by email at [email protected] or followed on Twitter at @samhardiman.

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