24 August 2009
A survey held by Better Business Bureau (BBB) concluded that more than 90 nursing homes in Missouri earn money off their workers through payday loans at high interest price. Several nursing home administrators in St. Joseph alleged that’s not part of their business they conduct.
According to the BBB, their employees who require financial assistance can availed the loan through computers presented at the nursing home. The borrowed amount can be automatically deducted from the employee’s next payday amount, along with service charges and interest price. The Community Financial Services Association of America says that “the service charges are varies from administrator to administrator but normally the maximum fee of $20 for a $100 cash advance and a charge up to 1,950 percent annual rate on the two-week loan.
The BBB mentioned in their report that even if the arrangement is lawful, it’s an “ethical gray area,” as the company is making profit from their employees earnings.
After this case the state of Missouri declared that nursing home cannot perform payday loans operation. However, the parent company of the facility can also own a payday loan establishment, which runs the computer terminals at nursing homes the employees use to get their advances.
Administrator at Carriage Square in St. Joseph, Todd Burford, said though the business does give payroll advances for a $15 bookkeeping fee, they’d never go so far as giving out loans.
He said. “If they have enough time to perform extra works apart from that then they can ask for an advance on their paycheck, we’ll do it,”
Mr. Burford said “He never wishes to charge his employees with high amount of fee but fee is important and we impose limited service charges.
He said “We never wish to indulge in this kind of process but due to requirement of the employees we’d be given out two to three checks a week.”
However Mr. Burford said “160 employees have required the advance payments due to the economy crisis, the present plan is as far as they will go.
He said “Infrequently they come to me and ask for advance on their paycheck. I told that it’s very difficult because that would be a loan.
An official at the living community of St. Joseph said they wouldn’t believe or heard that nursing home using payday loans for earning profits. The news press was to not able to speak with administrators at Saxton Care Centers for comment.
