Advance America chief out

Co-founder resigns for 'personal reasons'

COLUMBIA — The chairman and co-founder of payday lender Advance America Cash Advance Centers has stepped down, citing "personal reasons," the company said Wednesday.

George Dean Johnson, 67, resigned from the board of directors of the Spartanburg-based business Tuesday. William M. Webster IV, who also co-founded the company and most recently served as its vice chairman, will replace Johnson at the helm, spokesman Jamie Fulmer said.

He said Johnson, also a co-founder of Blockbuster Video, remains Advance America's largest shareholder.

"It's not because of any disagreement with the company, and it's not health-related," Fulmer said.

Founded in 1997, Advance America calls itself the nation's leading payday advance company, with more than 2,800 centers in dozens of states, Canada and the United Kingdom.

Some analysts have predicted that companies such as Advance America will struggle as state lawmakers propose bills to cap interest rates the lenders may charge. Ken Compton, chief executive officer, attributes a 4.2 percent profit loss in the first six months of this year in part to increased regulatory action in several states.

Industry leaders say the $15 lending charge on a $100, two-week loan offers consumers access to emergency money that's much cheaper than a bounced check or utility cutoff fees. Opponents say payday lending mires the poor in a cycle of debt.

In South Carolina, a bill failed in this year's legislative session that would have prevented lenders from making multiple loans and required consumers to wait before borrowing more while capping the amount they could get. Proponents vow to push for an outright ban on the industry next year.

Fulmer said loan takers are "overwhelmingly satisfied."

"Despite what critics say, this is a business that meets the needs of consumers, and it's why we're successful," he said.