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Payday Loans Can Be A Lifeline For The Poor -- Meddling Bureaucrats Would Yank It Away
Forbes ^ | June 17, 2016 | George Leef

Posted on 06/17/2016 7:48:07 AM PDT by reaganaut1

Despite Barack Obama’s Hope and Change promises to fundamentally transform the U.S., there remain a great number of Americans who live paycheck to paycheck (when they have work at all). Occasionally, they find themselves in desperate need of short-term credit to avoid a financial disaster, but they don’t have good credit.

One of their options is to get a short-term advance from a “payday lender.” In the typical transaction, a storefront lending business provides a cash advance of a few hundred dollars to the borrower, who promises to repay within one or two weeks with a fee of 15 to 20 percent.

Suppose auto mechanic Joe Smith is short $100 of being able to pay for repairs to his refrigerator. He goes to a local payday lender and gets the $100. When he gets his next check in two weeks, he repays the loan plus $15. To Joe, that’s much better than having the refrigerator break down, costing him a lot of wasted food.

Someone might point out to Joe that the annualized interest rate is usurious and claim that the lender is exploiting him. Joe would probably reply that he doesn’t care because it’s the best option he has. He might even tell the individual to go away and mind his own business.

Unfortunately, Washington, D.C. is full of bureaucrats who think that almost everything is their business, and won’t go away because they have power.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Editorial; Government; News/Current Events
KEYWORDS: cfpb; paydayloans
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1 posted on 06/17/2016 7:48:07 AM PDT by reaganaut1
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To: reaganaut1

More a noose than a lifeline.


2 posted on 06/17/2016 7:50:04 AM PDT by ilovesarah2012
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To: reaganaut1

So....I’m just spitballing here but I’m guessing George Leef got an extra envelope in his paycheck to write something about how it’s okay to f@ck some poor sap out of 500% interest so he can bail out a $100 payment due.

Go eff yourself George.


3 posted on 06/17/2016 7:50:56 AM PDT by Gaffer
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To: reaganaut1

Leftism: eliminating poverty by making it illegal.


4 posted on 06/17/2016 7:52:24 AM PDT by ctdonath2 ("Get the he11 out of my way!" - John Galt)
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To: reaganaut1

I’m guessing the banks are behind it, so they can make more friendly $5,000 bank loans and really trap the poor.


5 posted on 06/17/2016 7:54:46 AM PDT by Jonty30 (What Islam and secularism have in common is that they are both death cults)
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To: ilovesarah2012

Beats going to “Vito”. At least your legs will be intact if you don’t pay.


6 posted on 06/17/2016 7:54:55 AM PDT by dfwgator
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To: reaganaut1

You are misrepresenting “Payday Loans”.
Interest rates are 300%-499%. The payout can double in a few weeks.

The proprietors then try to convert them to “title Loans” where the pledged autos can then be repossessed and resold.

These types of loan traps the ignorant and leaves them despondent and broke.


7 posted on 06/17/2016 7:55:00 AM PDT by River_Wrangler (Nothing difficult is ever easy!)
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To: reaganaut1

Loan sharks can be a lifeline for the poor too. Hell, if loan sharks had the legal means to automatically deduct 500% interest from your paycheck and other income sources, they wouldn’t need to break legs and knock heads.


8 posted on 06/17/2016 7:55:50 AM PDT by Opinionated Blowhard ("When the people find they can vote themselves money, that will herald the end of the republic.")
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To: dfwgator

Vito is positively gentle and compassionate compared to what the courts will do to enforce a judgment.


9 posted on 06/17/2016 7:56:53 AM PDT by thoughtomator (Wisdom is doing due diligence before forming an opinion)
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To: River_Wrangler
If you pay it off within 3 days, there's no charge.

Big banks have invested in payday lenders, got to keep their profits up.

10 posted on 06/17/2016 7:58:45 AM PDT by Night Hides Not (Remember the Alamo! Remember Goliad! Remember Gonzales! Come and Take It!)
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Usury is immoral


11 posted on 06/17/2016 7:58:54 AM PDT by escapefromboston (manny ortez: mvp)
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To: reaganaut1

I’ve never seen someone speaking in favor of payday loans and their several thousand percent interest rates before.


12 posted on 06/17/2016 7:59:11 AM PDT by Lower Deck
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To: ilovesarah2012

I knew a poor woman who took out a 50 dollar short term loan from them. Within a year she was in debt to them for 400 dollars on that 50 dollar loan.

Another went to a check cashing and loan company in another state as she was short of cash. She needed 100 dollars, but balked when they demanded a check for 145 dollars before they would give her the 100 dollars.


13 posted on 06/17/2016 7:59:39 AM PDT by Ruy Dias de Bivar
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To: reaganaut1

Are they freaking serious? These loans come with interest rates that would make even Ebeneezer Scrooge blush.

They’re not even legal in NY.


14 posted on 06/17/2016 8:03:33 AM PDT by Snowybear
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To: Ruy Dias de Bivar

It’s too bad banks don’t make small quick loans with reasonable terms.


15 posted on 06/17/2016 8:04:49 AM PDT by ilovesarah2012
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To: escapefromboston

Yet JESUS tells of a man who went into a far country and left management of his businesses to three servants.
When he got back, two of the servants had doubled the money. The third did not and the owner says the servant should have took the money to the changers so he would have gotten an INCREASE with usury.


16 posted on 06/17/2016 8:06:36 AM PDT by Ruy Dias de Bivar
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To: reaganaut1

Mafia loan sharks may offer better terms. And they don’t use police to enforce collection.


17 posted on 06/17/2016 8:07:32 AM PDT by PAR35
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To: ilovesarah2012
You're wrong. When my car needed repairs and I had bad credit at the time, the payday loan was a lifesaver.

A better option than a payday loan is to go to a finance company, where you can get an actual loan, but with less interest and a reasonable monthly payment.

18 posted on 06/17/2016 8:07:54 AM PDT by Extremely Extreme Extremist (MAGA! Make America Great Again)
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To: reaganaut1
In the name of Almighty God and of ACTUAL compassion to the poor do I condemn your foolish and poorly-argued advocacy of the sons of vipers who prey on the desperate and offer a 'lifeline' in their time of need that becomes a noose. The stories of a solution turned slavery already posted here are but a handful of tens of thousands. Ladies and gentlemen, have we learned nothing from watching our own government's idea of fiscal solvency in action? The solution to not having enough money is not to borrow more money and especially not at ruinous usury!!!
19 posted on 06/17/2016 8:08:30 AM PDT by Laser_Ray (Another nifty idea)
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To: reaganaut1

The interest rate is commensurate with the risk. The borrowers are in a bad spot because of their own bad choices.


20 posted on 06/17/2016 8:08:39 AM PDT by Senator_Blutarski
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