Beyond Payday Loans (Note Authors)

Wall Street Journal ^ | 24 January 2008 | WILLIAM J. CLINTON and ARNOLD SCHWARZENEGGER

[shrinkermd]

The American dream is founded on the belief that people who work hard and play by the rules will be able to earn a good living...

But that dream is harder to achieve for millions of Americans because they spend too much of their hard-earned money on fees to cash their paychecks or pay off high-priced loans meant to carry them over until they get paid at work.

Here is one initiative that can unite progressives and conservatives as well as business leaders and community activists: helping the "unbanked" enter the financial mainstream by opening checking and savings accounts, and working collaboratively with financial institutions and community groups to develop and market products that work for this untapped market. This will put money in the pockets of individuals and grow the economy. And it won't cost taxpayers a dime.

Imagine the economic and social benefits of putting more than $8 billion in the hands of low- and middle-income Americans. That is the amount millions of people now spend each year at check-cashing outlets, payday lenders and pawnshops on basic financial services that most Americans receive for free -- or very little cost -- at their local bank or credit union. Over a lifetime, the average full-time, unbanked worker will spend more than $40,000 just to turn his or her salary into cash.

....Today, the number of check cashers, payday lenders and pawnshops is more than double the number of McDonald's franchises in the United States. More than 20 million Americans cash more than $60 billion in checks each year at check-cashing businesses. Full-time workers without a checking account typically pay $40 on average to cash their paychecks.(?) And payday lenders sell an additional $40 billion in expensive small-dollar loans each year that carry fees 30 times the average credit-card rate.

[ken21]

gov schwartzpuker got castrated by the dems in 2005,

and he hasn’t been the same since.