Approach to payday loan law uncharacteristic
I was a bit surprised to see the large title “Conservative Viewpoints” splayed across the top of this article about payday loans legislation.
See, all this time I had thought that “conservatives” were all about small government and individual responsibility. Apparently not when it comes to payday loans.
What’s all the fuss about payday loans?
Virginia lawmakers are all up in a tizzy because after they imposed limits on payday loan lenders that would essentially drive them out of business, those lenders found a way to keep their businesses afloat.
Virginia allows “open-end” loans, in which lenders can charge any interest rate they choose after a 25-day grace period. They are now seeking to ban payday loan companies from offering open-end loans. I should think conservatives would balk at the idea of placing such heavy-handed regulations on businesses.
I can take care of myself, thank you
Lawmakers in many states, including Virginia, harp on the payday loans industry, calling it “predatory lending.” They say that by offering open-end loans, payday lenders are “preying on” borrowers.
Excuse me, but those borrowers agree to specific terms beforehand. And payday loans are meant to be short-term. As long as borrowers keep up their end of the agreement and pay back the loan within 25 days they have nothing to fear. Why is it that all of a sudden these lawmakers don’t want people to have consequences for defaulting on an agreement?
An ounce of prevention
Conservatives’ argument against welfare is basically that if you help people too much they won’t help themselves. Why don’t they feel the same way about fiscal responsibility? If we set people’s limits for them, doesn’t that mean they won’t learn responsibility for themselves?
The best idea I’ve seen out of this whole recession ordeal is that financial education should be taught in public schools. I think education is the key, not creating laws that strip responsibility away from people when it comes to payday loans.
Regulation is like wine – in moderation it can be healthy, but if it interferes with what’s best for the whole, it’s time to cut back. Some of the negative spin that they give the industry may have some truth to it, but in the larger sense it doesn’t – not when most payday loan customers are middle class, have an income over $40,000 annually and the industry is a multi-billion dollar a year business. There’s just no excuse for getting rid of that size of commerce.
Incredible……the payday loan industry isn’t housed in huge skyscrapers with jets hangared at the airport waiting to transport bonus seeking executives to the next “traditional” junket in Vegas but it is being portrayed as the predatorial “sharks” needing iron-fisted regulation. And the public continues to fall for it as it applauds the implementation of each new anti-payday loan law.
This is how payday lenders in Virginia conduct their business? I’m absolutely amazed they are still in business with this rate. It’s enough payday loan customers in Virginia are given a 25 day grace period, but to actually ban the payday loan industry because of their collaboration is definitely out of line.
PAYDAY LENDING IS NOTHING MORE THAN LEGALIZED LOANSHARKING AT ITS BEST!!! Even loansharks state their terms up front, perhaps even more clearly than the payday lenders. The payady lending industry is a Predatory lending industry. I have a friend who worked for one in Virginia. As for they agree to specific terms, that company wanted him to present the facts so fast that the customer was just as in the dark as they were, if not more, before they heard it. And if they asked questions he was informed to be as vague as possible. They fly through the paperwork, hand the customer a copy, and rush to print that check before much else is said. They would give out the wrong payback dates, or not allow you to tell the customer when their 25 days were up in order to collect their high interest. Then they impose waiting periods to reborrow after doing the re-borrow the same day policy for months in order to force people who cannnot go a week before re-borrowing again to pay the high interest. The ownwer of his company said” I don’t care if the customer gets mad, if they aren’t paying interest we don’t want them as customers anyway”. I hope the Virginia General Assembly has enough sense to see them for what they reall are and BAN them in our state. Hell I wish they would make it a federal law so they would have nowhere to go. And do the same for the credit card companie so they won’t be able to threaten to move jobs to other states if you put a lower capon them. If its Fedral there is nowhere in the 50 states they can go to dodge it.
At least you said you want the government after credit card companies too, but you seem less ardent about their transgressions, which are far larger and far more egregious than payday lenders, by far. One would think that the larger of the two evils, and the larger of the two is most definitely the credit card companies, should be first on the hit list, but it seems that they often get neglected. Odd.