Posted on 10/02/2007 12:07:40 PM PDT by vietvet67
Utah payday lenders began refusing Monday to make loans to members of the military rather than give them much lower rates mandated by a new federal law. That new law, which took effect Monday, caps the annual interest on payday, car title or tax refund anticipation loans at 36 percent annually for members of the military and their families. A 2005 Deseret Morning News series found payday loans here averaged a whopping 521 percent interest, and car title loans averaged 300 percent.
Cort Walker, spokesman for the payday loan industry's Utah Consumer Lending Association, said Utah payday lenders simply cannot make a profit if they charge only 36 percent — so they will decline to do business with members of the military.
"At 36 percent annual percent rate, the total fees we could charge are $1.38 per $100 for a two-week loan. That is less than 10 cents a day," Walker said.
"Payroll advance lenders could not even meet employee payroll at that rate, let alone cover other fixed expenses and make a profit," he said. Walker added that for such lenders to reach the break-even point they must charge about $13.70 per $100 loaned for two weeks.
Walker said Utah payday lenders will now ask potential customers if they are active members of the military. If they are, "we cannot offer them a loan," he said.
(Excerpt) Read more at deseretnews.com ...
More business for the pawn shops.
Here it goes -
gov’t says you can’t charge that much interest to high risk people (military or not is not relevant),
but, then complains when credit is not extended to them.
Same as the “subprime” BS - it was GOVERNMENT that demanded that banks loan more money to the lower income, higher risk people, then comes back and blames the lenders when it all goes bad.
They pass this wonderful law. Instead of improving their lot, they have significantly worsened it. Thanks, government, for all you do.
Nothing personal, but I think they ought to close these places in ALL states. Make them completely illegal. If you need to borrow ten bucks til pay day and you’re in the military - I’d give it to you for no interest, in the interest of making sure you didn’t get scammed. (Of course, that’s assuming you pay me back on pay day :)) Seriously, these guys are scammers. They offer this “service” knowing full well they are going to rake in some dough and military members (as well as many other people) can’t wait a few days for their pay. If someone needs a loaf of bread or a gallon of milk that badly for their babies, then there’s people that will buy it for them. I’ve done it before.
“Back in the day”, pay day loans were handled internally. Someone would always loan you $20 for a $25 pay back come pay day.
Don’t you realize that the gov. has better and more important things to do than to worry about this trivia. Rush Limbaugh still has a job, darn it, and it’s there job to see that he doesn't in the future. Priorities, my friend, priorities.
You're not allowed to tell the truth about the subprime loan catastrophe.
Lenders are evil. Period.
Yup....we called it a slush fund. Wasn’t cheap to get money but it was available if you really needed it.
Actually, I think this is fabulous. The industry not the government stopped the predatory lending to our service personnel.
Once you start using these outfits, you start digging your foundation to financial ruin.
What’s wrong is that these publicly licensed loan sharks were allowed to go into business in the first place. Allowing 500% annual interest rates is despicable. That they won’t lend to the military does a favor to the military people who will now better organize their finances instead of dealing with these payday loan vermin.
Five for seven was the going rate for payday loans among shipmates on my ship. That's a 29% return! But nobody bi+ched about it.
Five for seven was the going rate for payday loans among shipmates on my ship. That's a 29% return! But nobody bi+ched about it.
Ah yes....Payday Loan joints and Pawn Shops. When I was planning on leaving Alaska and was looking for a place to move to in AZ I selected Kingman due to low housing costs, location, weather. the one thing I FAILED to do was to count the number of these types of businesses the town had. Both are indicators of trouble. Ah well, you live and you learn. They don’t call this place the “Meth & Mullet Capital of the SW” for nothing.
Stop with the double-click, JimRed!
1. Our military, especially the ground-pounders, are under-paid,
2. Our culture’s “gotta have it” versus “need it” mentality (or lack of mentality) gets a lot of people in trouble when combined with the legalized ‘loan sharks’.
3. A sad part about this stuff is that you will hear ads for loans like this, and other get-rich schemes on most of the 2nd tier ‘conservative’ talk radio personalities’ programs.
These “pay-day loans” are merely the modern-day equivalent of the pawn shops that have been around forever, and charge similar rates.
If you are convinced that the rates are so much higher than is required to cover costs and risk, then there is an obvious business opportunity for you to corner the market by offering loans at the mandated 36%.
So it’s better that people who need a bit of dough ahead of their paycheck have NO options, rather than a very expensive option?
I think its crap that anyone would try to rip off our troops.
Especially since the military cracks down on deadbeats....ie military are better credit risks because they will feel the wrath of their commanders if they fail to honor debts
The best way to fix this is to just have one lender break with the business-socialist cartel that refuses to loan. Once one of them breaks and starts lending at the 36% percent rate...the rest will follow
Cant believe so many turn anti-military when it comes to certain things
Is it evil to make a loan, knowing and hoping that your borrower will not be able to fulfill the terms of the loan? It's certainly not ethical.
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