Payday loans: Competition, Not Caps
More independent evidence supporting the presence of payday loans in society has become available.
Nick Sparagis of the PDL Industry Blog brings our attention to a recent independent report by Signe-Mary McKernan and Caroline Ratcliffe of the Urban Institute entitled “Enabling Families to Weather Emergencies and Develop: The Role of Assets.” This unbiased report based upon well-researched and clearly presented statistical data regarding the use of short-term loans by consumers argues that competition in the payday loan market is best to regulate prices.
Payday loans: a better alternative
The alternative on the minds of some legislators is to ban or otherwise regulate faxless payday loan companies out of existence. Yet as McKernan and Ratcliffe find (and they certainly aren’t the first), the alternatives consumers have after payday loans are not an improvement. Checking overdraft protection is a commonly used but ultimately unsatisfactory (expensive) alternative.
Financial support for McKernan and Ratcliffe’s study came from the Charles Stewart Mott Foundation. According to their Web site, the foundation is “committed to supporting projects that promote a just, equitable and sustainable society, since 1926.” Payday loan business support was not a factor.
Sparagis is realistic about a payday loan
Being a level-headed person, Sparagis knows that a payday loan is not “THE solution, but it can be A solution for some people.” Personal choice and responsibility are what is important. Government making payday loans go away is not a viable solution; responsibility over the use of loans lies within the individual. Allowing the public to choose empowers them.
Related videos
- Are payday loans responsible for the cycle of debt (personalmoneystore.com)
You know, there is only so much evidence that can pile up before social crusaders will stop plugging their ears and going “la la la la,” because Big Brother interfering with market demands isn’t going to do anyone a lick of good. Try this on for size: The primary beneficiaries of running out payday lenders are banks. Banks are one of the primary reasons we are in a recession because of the financial collapse, and we the taxpayers are giving them billions so they can keep buying gold plated back scratchers – so why should anyone help them out any more than we already are?