I agree with you. This is nothing more than legalized-loan-sharking. Furthermore they actually discourage paying off the loans.
This is great news. Like you both I am constantly counseling my troops on how this is a bad idea. I once had a troop owe $4500.00 to a few of these places. They a legalized loan sharks. In fact it’s gotten so bad we’re pulling clearances due to money problems. But on the other hand my troops need to learn the value of saving up for a big purchase. It’s hard to teach that.
Second dumbest comment commonly heard about customers of payday loan companies... Of course, #1 is, "They want customers who can't pay back the loans."
Only the government can survive with those business models.
Mark
Nobody is forcing customers to take these loans. Read the article -
“But new research suggests that most payday borrowers are more rational and informed than critics believe. [...] Nearly 90% said they were either very or somewhat satisfied with the transaction.”
The liberal elitist mindset loves stupid ideas like this one.
How so?
The terms and conditions are clearly outlined to the borrower. You have to have a good job (no temp or day jobs) with some history, a utility bill, some history at a residence (again, no homeless shelters or PO Boxes) and even then, depending on your income, you can only borrow a small amount to begin with. Also payday lenders do cross-checking to determine if you got existing loans at other payday lenders.
All this legislation will do is:
(1) Inconvenience people who need cash for emergencies knowing they get paid within the next week
(2) Hurt low-income workers who can't qualify for a standard bank loan
(3) More federal government intervention into the financial sector (funny, I thought FReepers were opposed to this)
(4) Boot more people out of work
Furthermore, payday loan stores are already regulated by state governments.