Payday lender to close up shop here

Advance America, Cash Advance Centers Inc. has announced plans to close its 45 centers in Oregon.

Advance America has three outlets in Medford and one in Central Point. Employees said the centers here will remain open until Oct. 31, but they aren't offering new loans.

The company, based in Spartanburg, S.C., said the Oregon closures are "the direct result of a new law that has already prompted most of our competitors to close."

The new law, which took effect in July, permits payday and car-title lenders to charge a $10 origination fee per $100 loaned, up to $30 for a loan of any size. Loans must be for a term of at least 31 days and interest rates are capped at 36 percent. Even with the limits, interest and fees can push the cost of such loans to the equivalent of an annual interest rate of more than 150 percent, which is still far less than the annual percentage rates that soared as high as 700 percent without the limits.

While the company's press release noted that Advance America had "determined that it is no longer economically viable to continue to operate in Oregon," it also noted that in the first six months of this year, before the increased regulation took effect, the centers in Oregon generated no gross profit.

Advance America also announced plans to close 31 centers in Pennsylvania because a court told the company's subsidiary there to suspend its current operations and discontinue one line of credit product. Additionally, the company has decided to close 27 underperforming centers in various other states.

— Anita Burke

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