Shawn Bawa has some pretty strong opinions about free-market society. And he should. For the past six years, Bawa has been building and expanding his business, Lucky Ca$h 4U, all while under some pretty harsh scrutiny by media and legislators alike.

A seven-year resident of Las Vegas, Bawa is a Canadian-educated business owner who says running Lucky Ca$h is his way of "following in my family's long history of business ownership." At the core of his business is the belief that consumers should be able to make their own decisions.

"The cash-lending industry fills an important role in the financing industry," he says. "We are willing to take loan risks that other lenders will not fund."

And to Bawa, "risk" is the key word. Many consumers, he says, aren't able to secure loans with banks, for one reason or another. But with Lucky Ca$h, a business that attracts people and small businesses with annual incomes anywhere from $25,000 to $200,000, they can.

"I and others in the community are in this business because we recognized that a significant number of borrowers are not able, or do not choose to, borrow from banks," he says. "I believe that consumers should have choices. As long as transactions are transparent, are fully disclosed, and available on a free-market basis, then consumers can make their own decisions."

As for the often misinformed belief that businesses like Bawa's are nothing more than legal loan sharks, the Lucky Ca$h owner says nothing could be further from the truth. Bawa's business issues collateral-free loans. Bawa threatens no up-front fees, no origination fees, no application fees and "no points that one might expect to be charged if they received funding from a bank," he says. In fact, Bawa adds, all Lucky Ca$h requires to secure a loan is a signature.

It's because of "fair loan and collection policies" that Lucky Ca$h has expanded to five locations in six years, Bawa says. Happy customers become repeat customers and even end up referring others, he adds. 

Bawa's belief in the consumer's right to decide stretches so far that he welcomes the very people who could draw business away from him: competitors. 

Why?

Because he believes competition will only strengthen the quality of the industry.

"Competition in my industry will lead to more choice, better rates and improved service," he says. "I am happy to compete with banks, credit unions, payday lenders, credit card companies and other lenders."

But Bawa is quick to point out the difference between payday loan centers and his business, which he calls "an installment loan lender." One main difference, he says, is the length of the loan. Bawa's business, for instance, provides loans that last longer than 12 months.

"Most of the loans that my company funds are larger than those given by payday lenders," he says. "In addition, we never take post-dated checks, we never hold a car title, nor do we cash checks for a fee."

In Bawa's line of work, good intentions and honest business practices aren't all you need to succeed. Well-informed and co-operative elected officials who are easy to work with and willing to listen also are key ingredients to sustainability.

Bawa, a member of the Nevada Lenders Association, says he looks forward to working with the Legislature during its upcoming session. That's when Assemblywoman and recently-selected Speaker Barbara Buckley, D-Las Vegas, plans to introduce legislation to further regulate the short-term lending business.

Last year, Buckley reportedly suggested the state's regulation of payday loan businesses isn't strict enough, and said she wanted to take the authority to regulate the industry from the Financial Institutions Division and give it to the Mortgage Lending Division.

The assemblywoman was the driving force behind a 2005 bill that requires payday lenders to disclose the fees made on each loan. It also put a limit on the interest charged on a loan that is in default. But some lenders changed formats, she explained in her December press conference, and switched from issuing short-term loans to one-year loans, which don't fall under the same guidelines.

Her Bill Draft Request, which the legislature will consider this session, apparently seeks to do away with that loophole. Attempts to contact Buckley were unsuccessful and the assembly's constituent relations department said it couldn't explain the proposed measure. Buckley's website lists consumer protection as one of her top concerns.

"As a legislator, people often come to me with problems they face," Buckley says in an online statement. "Sometimes it involves an area overlooked by the law where people are cheated and there is no protection."

Buckley then delves into the falsification of credit applications and other unfair business practices, while telling the stories of wronged car buyers and contractors who escape costly claims by filing for bankruptcy.

"These consumer protection laws will prevent people from being ripped off and keep our state from becoming a target for con artists," she concludes. 

Dan Wulz, deputy executive director of Clark County Legal Services, the organization that Buckley heads, says his group is backing efforts to further regulate the short-term lending industry.

"We would certainly be in favor of seeing the 'one year or more' requirement to (Nevada Revised Statute) 604A deleted ... so that all high-interest lenders are covered by the same law, playing by the same rules on the same playing field," Wulz says. NRS 604A regulates the payday loan industry, but does not pertain to lenders like Bawa, who offer loan terms longer than 12 months.

Wulz, like Buckley, believes many payday lenders switched to 12-month loans in an effort to dodge the assemblywoman's 2005 legislation.

"It was done that way in 2005 because most of the payday loans were generally written for a two-week period and no one thought that (lenders) would change their business model to evade the law by writing them for one year or more," Wulz explains.

But they did, he says.

"There are some renegades who decided to start writing their loans for exactly one year or a year and a day," he says. "And they say, 'Hah! None of those regulations apply to us.'"

Wulz is unfazed by arguments that regulation stifles the free-market economy. A free-market is definitely ideal, he says, but not practical.

"In a perfect world, restaurants would not have to be inspected by the government because people wouldn't go to the places that make them sick," he says. Similarly, a perfect world would weed out the bad seeds in the short-term lending industry. But until that world exists, he says, there has to be some point where the government steps in.

"I understand the free-market economy, but I also don't believe in price-gouging," he adds. 

Wulz believes interest-rate caps, like the ones imposed in other states, could be a step in the direction of solving the problem. Consumers would find it easier to get themselves out of debt, and businesses would still be able to operate. And if some lenders did go under, he says, things would be more or less back to the way they used to be.

"When the federal (interest-cap) laws went out the window, then that opened it up for each state to do whatever they want," he says. "The economy went on and life went on before that happened.

"If I were king for a day," Wulz adds, "I would have an interest-rate cap."

While Bawa and Wulz may not agree on the lending industry, at least both sides are willing and able to work together. Bawa says he's excited to help officials find a way to ensure consumers aren't deceived or financially destroyed.

"I personally pledge to work with the legislature to resolve any issues that may exist," Bawa says. Believing in free-market values doesn't mean opposing any and all regulation, Bawa says. He and the NLA intend to "work with elected officials to find regulatory language that will strengthen the industry while assuring that the public will be protected."

Like competition, he says, a certain amount of regulation can only make his industry better.

"Regulation should protect consumers from fraud and other business practices that distort the market," Bawa adds. "We are prepared to meet with any interested party to work on good consumer legislation that allows us to continue to operate as 675 (the Nevada Revised Statute that regulates installment-loan companies) lenders."

That communication is part of Bawa's hope that uninformed legislators will come to understand the positive services his business can provide.

"We have a responsibility to educate elected officials about the industry," he says. "We will work with the legislature to make changes to NRS 675 that permit our industry to operate in the community and, at the same time, limit any abuses that may exist."

With the right combination of competition, regulation and "the continued need for loan services in the community," the installment-loan industry just might expand more. At the forefront of that expansion, Bawa hopes, will be Lucky Ca$h 4U.

And because the business is locally owned and operated, has a good understanding of Southern Nevada's economy, and tries "to do what we can for the people of this great state," Bawa is sure his company is up to that task. LW