Posted on 06/08/2016 10:22:59 AM PDT by Lorianne
To voters living comfortably in Cambridge, Mass., or the suburbs of Seattle, the payday lending crackdown sounds just right: Those storefront entrepreneurs of dubious extraction are preying upon the poor. They should be banned. But for the Consumer Financial Protection Bureau, the creation of Dodd-Frank which has been busy demonstrating the dangers of an unrestrained regulatory state, a slogan that polls well with liberal voters is only a starting point. The end result of its new payday rules, like all Obama regulatory endeavors, is to concentrate more power in the hands of Washington lobbyists and politicians and the companies that can afford to pay for them.
CFPB director Richard Corday’s 1,300-page regulatory edict will require payday lenders, an industry largely made up of thousands of storefront operators, to run full credit checks on prospective borrowers (average loan $392) to test their sources of income, need for the loan, and ability to keep financing their living expenses while paying it back. Perversely, this will make it hard or impossible to serve those customers who use the payday lending service most appropriately—who borrow when pinched but then promptly repay and don’t roll over their debt. The industry will become more focused on retaining habitual users, those who take out loans many times a year and get caught in “debt traps,” continually rolling over what are supposed to be short-term, high-margin loans.
(Excerpt) Read more at wsj.com ...
I’m sure the Mafia supports this, now folks will go back to getting their money from “Vinnie”.
My bank lent me an overdraft loan of $40 I needed to borrow.
Now liberals want the bank to run a check on me, to have them ask why I need a short-term loan and if I can live within my means.
Bureaucrats want to decide if a financial institution can lend you money. That’s not up to the latter and the lender they deal with.
Washington knows best.
I know it’s capitalism....but these are the very sorts of people Jesus threw out of the Temple.
Payday Loans, Drones, Vapes, anything they can destroy they will.
I loathe Payday Loans on principle, I would rather chew off my arm than use one.
That being said, the poor that are dumb enough to use them, they will remain poor.
I have been poor before and I avoided them like the plague, but I didn’t stay poor for long because I worked hard not to remain poor.
We will always have poor dumb people, trying to remove a “natural selection pressure” ie. payday loans does nothing in the long term to “improve the health of the herd” in fact it makes it worse in the long run.
People need to be educated about payday loans, and what high rates of interest are charged.
They fill a need for some people. I am leery of wanting to ban or regulate them out of existence. But people should know how they work and that any other source of borrowing, even a credit card cash advance, is likely a better way to borrow if you have some sudden big expense come up.
If they set up in a temple, Jesus can throw them out again.
I was driving a rental car in Chicago last year and had to exit from a toll road. When I got to the booth, however, it did not allow payment in bills and I had no change.
As a result, they charged my credit card for $17.55 about two months after I incurred a fifty-cent toll. What’s the effective interest rate on that? I suppose loan sharking is okay when the government does it in much the same fashion as lying, voyeurism, murder, theft, and kidnapping are okay when the government does it.
I guarantee you the feds want to shut them down so they can take over the racket. Heap Big Heart Liawatha Warren will ride in on spotted horse to save brown man from white man who speak with fork tongue and give big wampum.
I think these payday offices are actually connected to large Wall Street firms, despite their generally low rent appearance.
After the high yield subprime mortgage market collapsed they went hunting for another high yield lending market to develop.
Yeah, and let's have the government control all the other prices, too!
All in the name of morality, of course.
Back in my day they called this type of a business “loan sharks.”
The only job I could get when I got out of the Service in 1970 was a bill collector for a Texas company: Great Western Finance Company.
Back then they made loans here in Texas from $25.00 to $2,500.00. You could not believe the interest rates and the fact that we actually had customers that came in at least every 120 days to make another loan. Over and over again and we called it “flipping loans” and it was the “bread and butter” for the company.
Usury laws were in force consistently from the founding of the Republic up until an ill-advised SCOTUS decision (surprise!) in the late 70’s.
Price controls have only been done sporadically (during WW II, under Nixon, etc.)
Or do you think we should legalize mugging and pickpocketing too?
I am reduced to BEGGING fellow conservatives to see this. Every person who falls into a scam job like Amway or gets trapped in a version of white slavery with these sleazy places often is a lifelong socialist because of their well-founded bitterness toward the current system that ripped them off.
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