House party for the payday loan
Recently, a package of payday loan legislative proposals was heard by the House Financial Institutions & Insurance Committee. According to blogger House Democrats, these Department of Financial Institutions-regulated short-term loans have spawned a host of potential new bills. House Democrats is nice enough to provide links to early reports on the hearings here and here. Here’s what’s on the docket:
- HB 1310, regulates collections contact
- HB 1425, which simply prohibits cash advance (why bother with the rest, then?)
- HB 1684, limits all outstanding loan balances to less than 30 percent of a borrower’s gross income
- HB 1685, would add a 60-day repayment option
- HB 1709, minimum term 60 days, reduces fees may not exceed 10 percent of principal, and sets up an installment plan
- HB 1805, limits borrowers when a payday lender has loaned them $700 in the previous 30 days
- HB 1806, sets an aggregate loan limit of $700
- HB 1807, prohibits faxless payday loan rollovers within 24 hours of repayment
- HB 1851, requires that borrowers be made aware of payday loan alternatives
Church has invaded state
One of the main complaints some have against payday loans is that the rates exceed state usury laws. First of all, that’s using the oft-discredited and completely inapplicable method pretending that payday loans> are annual loans. They aren’t, no matter how much lipstick you put on that pig of an idea. Furthermore, the whole idea of usury laws is a holdover from a time when religion unabashedly held power over world governments.
The world has become a bit wiser, but the influence is still hard to shake. Finally, opponents claim that when the loans were first made legal, nobody knew that people would use them more than occasionally. Really? Then set up a database and place reasonable limits on how much consumers can borrow. Do not play big brother for them, or you will face eventual revolt and anarchy.
Payday loan supporters favor choice
It would be a gigantic mistake to ban the payday loan. When people have options, according to these folks, they can make better decisions. Considering that these are basically two-week loans, consumers must show discipline in order to repay on time. And guess what? Studies show that most do (as much as 90 percent)!
Related articles
- Cap payday loan costs, board urges (thestar.com)
- Media Advisory: Canadian Payday Loan Association Available for Comment on the Government of Ontario’s Advisory Board Report on Payday Loan Rates (newswire.ca)
- Payday Loan to Meet your Expenses (personalmoneystore.com)
Anecdotal evidence doesn’t hold up because it is just that – anecdotal. Do some people get into traps? Sure. However, they are known, by the fact of empirical evidence, to be a small minority. Nearly every study that has been published on payday lending has shown that the overwhelming majority of customers pay back the loans on time. So we want to make sure that responsible people can’t make decisions for themselves, and only do what Big Brother thinks is OK?
After working for years in this industy I have seen first hand how much this service hurts people even though these companies claim to help people. Glad Im out I feel a lot better about myself. Greed is no answer to the problems we all face.That is why the world is in this mess and Payday Loan are adding to it. Get rid of them. If you can’t afford the rent and need money get rid of the cell phone or get off The SSI and get a job. 40% OF PAYDAY LOAN CUSTOMERS ARE EITHER ON SSI WHICH MEANS THEY DO NOT WORK FOR SOME UNKNOWN INJURY, MOST IS JUST LAZY.Most never repay anyways, and the retierd and no one should be screwing these poor people.
Let people have choice. If they shut the payday lenders down, I will have drag my stuff to the pawn shop. Now that is humiliating. Just let me write a check. I will do my business my way. It is not up to you to say what I should do?