Short-term loans a controversial issue
A debate over payday cash advance loan laws is heating up in the South Carolina legislature this week. The issue has grown so contentious that a South Carolina newspaper, The State, says it might not be possible to pass a bill this week.
Details on the bill
The House bill, currently being revised by the Senate:
• Raises the limit on payday loans to $500 from $300
• Establishes a limit of one outstanding loan at a time
• Provides a deferred payment plan for borrowers who cannot make their re-payments on time
• Requires a two-day cooling-off period between loans.
Already killed
There is an amendment pending that might bring back some of the provisions included in a Senate bill that was voted down earlier this year. The amendment could include versions of these regulations:
• Tie the amount of payday loans to a borrower’s income, allowing loans of 25 percent of income or $500, whichever is less
• Install a seven-day cooling off period between loans
• Ban electronic debiting of a borrower’s checking account
Adding inconvenience to injury
Perhaps the intention behind the final amendment, banning electronic debiting, is to protect consumers. However, in truth it greatly inconveniences people who currently have the option of securing instant payday loans online without having to go to a payday loan store location.
Online payday loans allow people to get cash advances, installment loans and other short-term loans from the comfort of their own computer. This increasingly popular service saves customers time and money. Allowing electronic debiting is an important part of the process, as it allows the entire transaction, from loan to repayment, to be carried out without having to visit a payday loan store.
South Carolina would be doing its residents a great disservice if it complicates the process of securing and repaying online payday loans.
What an oddity – there is such a call to regulate one financial product, and run it out of the land, yet our government at the same time turns right around to bail out credit card and mortgage companies who inflict more damage than payday loans do, far and away, and on the notion of a cycle of debt, all the money we’re printing for the bailout is putting the entire country into a cycle of debt we aren’t likely to ever get out of. It seems hypocritical at best – not to mention that the usual proponents of a payday lending ban want to establish a welfare state, which we also can’t afford to pay for.
That is really a bad news. Getting loan from the Internet is the best thing ever happened to the banking sector. Less hassle and more convenience is what it made what it is today..