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 ...
More a noose than a lifeline.
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.
Leftism: eliminating poverty by making it illegal.
I’m guessing the banks are behind it, so they can make more friendly $5,000 bank loans and really trap the poor.
Beats going to “Vito”. At least your legs will be intact if you don’t pay.
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.
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.
Vito is positively gentle and compassionate compared to what the courts will do to enforce a judgment.
Big banks have invested in payday lenders, got to keep their profits up.
Usury is immoral
I’ve never seen someone speaking in favor of payday loans and their several thousand percent interest rates before.
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.
Are they freaking serious? These loans come with interest rates that would make even Ebeneezer Scrooge blush.
They’re not even legal in NY.
It’s too bad banks don’t make small quick loans with reasonable terms.
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.
Mafia loan sharks may offer better terms. And they don’t use police to enforce collection.
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.
The interest rate is commensurate with the risk. The borrowers are in a bad spot because of their own bad choices.
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