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Wall Street, Payday, and Dollar Financial

Adam Rust's picture

Posted May 1, 2013

Today's Wall Street to Main Street connection centers on the financing of Dollar Financial.

Dollar Financial provides payday loans, pawn lending, check cashing,

unsecured short-term consumer loans, prepaid debit cards, and military installment lending. The company is now operating in several continents.

Dollar Financial has been able to borrow money from some of the nation's largest banks at least five times in the last decade.

Wells Fargo, in consortium, amended its existing credit agreement with DFC Global (Dollar Financial) ("DDLR") on Dec. 31, 2012. The original loan was arranged on March 3rd, 2011. It consisted of a $250 million revolving line of credit which could be increased to as much as $250 million.

The specific dollar amounts attributable to each bank was not released in their filing, but the names of the lenders were included. The list of lenders consisted of Barclays, Credit Suisse, Deustche Bank, US Bank, and Nomura International.

Dollar negotiated $475 million in October 2006. With $121 million, Dollar purchased 82 National Money Mart stores. Those stores, all located in Canada, were retail payday lending shops. Another portion was used to pay off notes bearing interest of 9.75 percent. They also increased the pay of their CEO.

Circling back, this is one more example of how Wall Street is making it possible for payday lending to operate on a national scale.