Shameful Assumption
Newport News, Virginia’s Daily Press has published an anonymous editorial about payday loans entitled “Payday payback.” I suppose it should come as no surprise that the editorial was printed without a byline, because no one writer should have to shoulder that much embarrassment. This way, the entire newspaper can share in the shame.
Why shame? Because this polemic is in no way based upon fact. It is a flailing attempt at audience manipulation. Using their metaphor, lawmakers in Virginia gave no fax payday loan companies “a stick with which to whack vulnerable Virginians.” This “stick,” according to the wisely anonymous author, is a 400 percent annual percentage rate of interest.
Call a stick a stick, Daily News… but your stick is a red herring!
Payday loans are not annual loans! They extend microcredit to consumers in need between paydays. Since most people are paid every two weeks or once a month, a yearly percentage rate here is like measuring the temperature of your steak with Skylab. If a borrower takes out a $300 payday loan that requires that they pay $25 per $100 borrowed, that’s a $75 fee, which is NOT 400 percent interest, as the loan is typically paid in two weeks (by the following payday). That’s paying 25 percent interest, plain and simple.
Care to try a different stick, Daily News?
You refer to the “unusually diverse coalition of compassionate people, from local governments” who “succumbed to the cruel combination of intransigence, power and arrogance whipped up by Senate Majority Leader Dick Saslaw and passed an alternative bill that everyone knew would be ineffectual.”
An unusually diverse coalition? Cruel treatment? Intransigence? That makes for only halfway entertaining theater. Let’s take these one at a time. Are you referring to some kind of “rainbow coalition?” Would it be unthinkable that a coalition could be wrong and diverse at the same time? Moreover, if a Senator takes a stance against a bill, how does that make him cruel? That’s the political game, Daily News. You are a “Daily” and you do distribute “News,” correct? You should know this already.
Now, about this intransigence business
This is characterized by a general stubbornness. Perhaps Mr. Saslaw recognized what you and the anti-payday loan peanut gallery do not – that the product works when used in moderation. You can quote annual percentage rates until you’re blue in the printing press (how’s that looking for the newspaper business, dinosaur?)… that won’t make payday loans annual loans. Those figures are only out there because the Truth in Lending Act requires it. Payday lenders make that rate very clear to the public, even if it does not apply appropriately to their product. It’s the best the government could come up with, which isn’t saying very much.
And yet you continue to perpetuate the APR fallacy regarding payday loans. Who’s displaying an intransigence streak a mile wide, Daily News? Moreover, when it comes to your accusations that the industry as a whole does not disclose rates, you display your ignorance, whether it is intentional or not.
You assume borrowers are destitute? You assume much.
Here is an example of the sample customer for a payday loan business. These people are not the destitute lot you claim them to be. In fact, they’re far from it. Payday loans are designed to help anyone who qualifies and needs quick cash during a short-term financial emergency. There is no coercion, there is no deception. You deceive your readers by suggesting otherwise, Daily News. Payday loans are a bridge from a tough place financially to more solid ground before payday comes around. But that’s OK, Daily News. You’re more than welcome to try to cross that river with your stick…
Payday loans have been a target in the media for a very long time. Nevertheless, they are still around. The payday loan industry has been blamed for many things, accused of being the cause of the cycle of debt that’s seen across the nation. There have been stories told of payday lenders over charging consumers and leaving them with a bad name and piling debt. However, payday loans have helped a great number of people overcome temporary financial dilemmas. Even the economy will not function properly without the support of payday loans and other types of loans.