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Tracing Main Street Payday Loans back to Wall Street: Advance America

Adam Rust's picture

Posted April 26, 2013

Even though Advance America's sole business is to sell payday loans, consumer installment loans, and cash advances, the company had no trouble attracting lots of money from Wall Street.

The most recently available credit agreement announced by Advance

America is now two years old. It is very possible that the company has renegotiated since then. However, Advance America ceased to be a publicly traded company in 2012. At that point in time, a syndicate of lenders led by Wells Fargo terminated their credit agreement.

At the time, Advance America had a line for $300 million. Lenders included Bank of America, Wells Fargo Bank, US Bank, Synovus, Capital Bank NA, First Federal Savings and Loan Association of Charleston, First Tennessee Bank, Bank of Oklahoma, BB&T and Fifth Third.

Advance purchased the retail division of CompuCredit (pdf) on August 5th, 2011. Prior to the acquisition, CompuCredit had entered into settlements with the Federal Trade Commission for unfair and deceptive practices.

In January, the FTC shut down a Texas debt collector "that allegedly used deception, insults, and false threats against consumers."  The FTC charged Goldman Schwartz with multiple violations of UDAP. Advance America was a client of Goldman Schwartz. Among the illegal practices described in the complaint (soon to go to court) was the assertion that Goldman Schwartz told consumers that their minor children could be taken from customers and given to the government.

Advance America also operates ancillary lines of business as sellers of re-loadable prepaid debit cards and as tax preparers.

 

 

 

 

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