Posted on 12/30/2007 2:36:27 PM PST by VRWCtaz
I can not defend the wisdom of taking out such a loan. But I have to ask, do we really want the government to “protect” us to this degree?
Didn’t we learn anything after Prohibition? Someone else is going to step in to provide the service, and they won’t take very kindly to any regulation at all.
I like your train of thought.
Apparently not, considering politicians on both sides of the aisle seek to use the big stick of government to a greater degree than ever before.
The entire system is messed up but some folks need their car fixed now.
Ah, I hate it when people make too much money. Luckily the government is there to help keep that from happening.
Fellows payday loans fill a void that the banks cant do. Who can walk into a bank and get a 100 or 200 dollar loan. The minimum a bank will lend is 5 thousand and it often takes days to receive the money. Payday loans provide short term loans to people who cant get a loan elsewhere. The interests is high, but so is the risk on the lenders side. Nobody forces people to take these loans. I thought people here were for free enterprise and capitalism, since when is that not a conservative concept??
Exactly right! And I would much rather have it operating in the full light of public display.
Payday and car title lenders serve a valuable pupose in separating money from stupid people, money that might otherwise be spent for things like crack...
It’s kinda too late for these naive libertarian (small ‘l’) sentiments when the rear view mirrors on your car are heavily regulated by the gummint, not to mention hundreds of other parts of the vehicle. Same with banking, and paint manufacturing industries, and everything else, so why not regulate sleazeball loan sharks?!
Go over your credit limit by a couple of dollars or have an overdraft of the same amount on your checking account and you can get hit with a fee that is several times the amount you are over. The real loan sharks are the banks and credit card companies.
Nope. Just ask the DEA.
I thought people here were for free enterprise and capitalism, since when is that not a conservative concept??
I am all for free enterprise, and less regulation. But the rapid growth of these payday loan places, which in their business model is really just legal loan sharking, points to some neighborhoods with serious problems. Those problems won't get solved by just slapping regulations around, but they might get solved by studying why people need to use payday loans. My suspicion is that a significant portion of the business is an entry point into criminal activity, especially drugs.
Woe is me, the war is lost. We can’t win, so why try?
Does that sum it up?
Interest rates are deceiving when applied to very small, high-risk loans. A minimum fee necessary to make any transaction profitable — but the fee for a small, short-term “payday loan” looks deceptively outrageous when translated to an interest rate. It should be remembered that these loans are not for creditworthy borrowers who have access to competitive lending markets. Payday loans are made to high-risk borrowers who present lenders with higher frequencies of expensive collections and write-offs. If meddling politicians mandate artificially low fees for small high-risk loans, lenders will put their capital to better use — and those with the worst credit will lose access to the voluntary lending market. Then, thanks to well-meaning do-gooders, high-risk borrowers will be left at the mercy of underworld loan sharks who handle collections with baseball bats. I would rather let free markets set the rates...
I know!
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