TakeYouToTasker Posted August 13, 2014 Share Posted August 13, 2014 (edited) So to recap your argument, all payday loans exist to keep people out of desperate homelessness and save children from starving...all at 400% interest. Got it. You're a business owner, if I remember correctly, so you clearly understand why businesses exist: to make a profit. No business exists (perhaps persists would be more apt) without a workable business model. Workable business models spawn from shrewd businessmen (or women) correctly identifying a need in a subset of individuals, and addressing it in a sustainable manner which makes the potential revenue of any such venture worth the risk of loss. There is a reason that the only lending institutions that have evolved in the marketplace which service this type of clientele are payday loan franchises, with the exception of pawn shops. Lending is not a new business. If other business models were viable, they would be available, and they would be dominate in the sector, as they would be more consumer friendly than their counterparts which we are discussing, with whom they would compete for business. I think you're picking an argument for the sake of picking an argument. Perhaps gator will return to be your chew toy, but this isn't an all-or-nothing discussion. The people who find themselves relentlessly stuck in the payday loan cycle are the very people who genuinely need help. No, not an unsecured government loan, you fool, but real help. The proverbial hand up, so to speak. The next time you think to call me a fool, after you've come to your place of reasoning by feeling your way there, you should stop and slap yourself. Who provides this "help"? What do they provide? Do they provide money? Is the expectation that they pay it back? If they are, how do you deal with the realities of a demographic that doesn't pay? Why hasn't a business, other than payday loans, arrived to fill this gap? I think if, as you argue, that the very last line drawn between homelessness and starving children is a payday loan store, then we're in a bigger schithole than either of us imagined, and there's no satisfaction in being right about this topic from either angle. Of course there's no satisfaction in being right about this, but that doesn't change the reality of the situation. Some people have it bad, and there will always be people in dire straits who have exhausted all other options. This has always been the case, and always will be the case. Edited August 13, 2014 by TakeYouToTasker Link to comment Share on other sites More sharing options...
Doc Posted August 13, 2014 Share Posted August 13, 2014 No one is forcing people to take out these loans. Link to comment Share on other sites More sharing options...
GG Posted August 14, 2014 Share Posted August 14, 2014 Payday lenders play in a very messy part of the credit universe. Their tactics are unseemly for anyone who has a bank account and a regular credit card. But those are not the people who use the payday services. If you stop the legitimate payday lenders even at their high fees, rest assured there will be other players more than willing to step up to the plate at twice the rate. Payday lenders play in a very messy part of the credit universe. Their tactics are unseemly for anyone who has a bank account and a regular credit card. But those are not the people who use the payday services. If you stop the legitimate payday lenders even at their high fees, rest assured there will be other players more than willing to step up to the plate at twice the rate. Link to comment Share on other sites More sharing options...
birdog1960 Posted August 14, 2014 Author Share Posted August 14, 2014 http://www.latimes.com/opinion/opinion-la/la-ol-john-oliver-hbo-payday-loans-sarah-silverman-20140811-story.html. this is exploitation, pure and simple. it's become a very typical american trait. and it's easiest to attack the weakest. it's also the most distasteful and unseemly. to riff on la's pleasantly surprising theme: a little collective conscience would go a long way here. Link to comment Share on other sites More sharing options...
GG Posted August 14, 2014 Share Posted August 14, 2014 Silly question, but why do states run lottery games? Do the poor spend more money on lottery tickets than on payday fees and interest? Link to comment Share on other sites More sharing options...
birdog1960 Posted August 14, 2014 Author Share Posted August 14, 2014 Silly question, but why do states run lottery games? Do the poor spend more money on lottery tickets than on payday fees and interest? $800/yr per capita in mass. by one estimate. it's a tax on the poor, in essence. it does have the redeeming feature that funds are generally spent on public works eg schools. but citing another wrong doesn't change the argument against payday loans. Link to comment Share on other sites More sharing options...
IDBillzFan Posted August 14, 2014 Share Posted August 14, 2014 $800/yr per capita in mass. by one estimate. it's a tax on the poor, in essence. it does have the redeeming feature that funds are generally spent on public works eg schools. but citing another wrong doesn't change the argument against payday loans. On the contrary, if you're gator talking about Obama, citing another wrong always justifies another wrong. Link to comment Share on other sites More sharing options...
GG Posted August 14, 2014 Share Posted August 14, 2014 $800/yr per capita in mass. by one estimate. it's a tax on the poor, in essence. it does have the redeeming feature that funds are generally spent on public works eg schools. but citing another wrong doesn't change the argument against payday loans. By stifling legal payday lenders you'll just empower the local organized crime gangs to step into the void. That's why the states got into the lottery business. You can't regulate supply unless you also address the demand. Link to comment Share on other sites More sharing options...
DC Tom Posted August 14, 2014 Share Posted August 14, 2014 By stifling legal payday lenders you'll just empower the local organized crime gangs to step into the void. That's why the states got into the lottery business. More likely, you're just driving organized crime back into the shadows. Really...loan-shark rates and the perfect money laundering front. How is organized crime NOT involved with payday lending? Link to comment Share on other sites More sharing options...
birdog1960 Posted August 14, 2014 Author Share Posted August 14, 2014 More likely, you're just driving organized crime back into the shadows. Really...loan-shark rates and the perfect money laundering front. How is organized crime NOT involved with payday lending? exactly. and they have evolved to the point where they are comprised of actual legislators (see oliver's bit on the texas legislature). Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted August 14, 2014 Share Posted August 14, 2014 More likely, you're just driving organized crime back into the shadows. Really...loan-shark rates and the perfect money laundering front. How is organized crime NOT involved with payday lending? How cash heavy is the business flow? Link to comment Share on other sites More sharing options...
DC Tom Posted August 14, 2014 Share Posted August 14, 2014 How cash heavy is the business flow? Payday loans? Pretty heavy, traditionally. Walk in, present a pay stub, walk out with cash. Pay back two weeks later. At a 300% APR, the interest is about $10 per $100 loaned. Disburse $100 cash, get back $110 clean in two weeks. That's a fabulous money laundering scheme. The only reason I would think organized crime DOESN'T have their fingers in that pie is that it's so damned obvious and lucrative that law enforcement is likely to monitor it closely. Link to comment Share on other sites More sharing options...
birdog1960 Posted August 14, 2014 Author Share Posted August 14, 2014 Payday loans? Pretty heavy, traditionally. Walk in, present a pay stub, walk out with cash. Pay back two weeks later. At a 300% APR, the interest is about $10 per $100 loaned. Disburse $100 cash, get back $110 clean in two weeks. That's a fabulous money laundering scheme. The only reason I would think organized crime DOESN'T have their fingers in that pie is that it's so damned obvious and lucrative that law enforcement is likely to monitor it closely. depends on how you define organized crime. many of these shysters have been fined millions for illegal fees and interest rates. it's stealing. they're criminals. it's organized. the big difference is that if their customers stole a fraction of what they have, they'd be in jail. Link to comment Share on other sites More sharing options...
Azalin Posted August 14, 2014 Share Posted August 14, 2014 (edited) Payday loans? Pretty heavy, traditionally. Walk in, present a pay stub, walk out with cash. Pay back two weeks later. At a 300% APR, the interest is about $10 per $100 loaned. I've never taken a payday loan, so I don't know about the interest rates, but I had been assuming the rate would be higher than 10%. that's a better rate than many credit cards offer, so it would seem to me that a payday loan could cost the borrower less than other options might, provided they paid it back on time. Edited August 14, 2014 by Azalin Link to comment Share on other sites More sharing options...
DC Tom Posted August 14, 2014 Share Posted August 14, 2014 I've never taken a payday loan, so I don't know about the interest rates, but I had been assuming the rate would be higher than 10%. that's a better rate than many credit cards offer, so it would seem to me that a payday loan could cost the borrower less than other options might, provided they paid it back on time. That's 10% over two weeks. That's much, much, MUCH worse than any halfway-reputable credit card. Link to comment Share on other sites More sharing options...
Azalin Posted August 14, 2014 Share Posted August 14, 2014 That's 10% over two weeks. That's much, much, MUCH worse than any halfway-reputable credit card. I understand that part of it, but I guess I'm assuming that the payday lender bases the amount of the loan eligibility on the amount shown on the pay stub that the borrower shows them. if the amount is within the means apparent on the pay stub, then 10% over two weeks might be a bad rate, but not nearly as bad as people are making it sound. Link to comment Share on other sites More sharing options...
KD in CA Posted August 14, 2014 Share Posted August 14, 2014 I understand that part of it, but I guess I'm assuming that the payday lender bases the amount of the loan eligibility on the amount shown on the pay stub that the borrower shows them. if the amount is within the means apparent on the pay stub, then 10% over two weeks might be a bad rate, but not nearly as bad as people are making it sound. It seems to me the big problem is that people get on this revolving door where they are taking the payday loan every week because once they are broke, they can't pay back the loan and fund expenses till the next paycheck. Now you're talking hundreds of dollars per year for someone who can't afford that at all. I once taught a few basic personal finance seminars to minority kids; one group was just hanging on till high school graduation, the other were all college kids. Even with the college kids, the lack of even the most basic understanding of personal finance was astounding. These kids understood money less than what you'd expect from your 9 year old. It's criminal that our education system includes absolutely nothing at any level about personal finances. Link to comment Share on other sites More sharing options...
Azalin Posted August 14, 2014 Share Posted August 14, 2014 It seems to me the big problem is that people get on this revolving door where they are taking the payday loan every week because once they are broke, they can't pay back the loan and fund expenses till the next paycheck. Now you're talking hundreds of dollars per year for someone who can't afford that at all. I know someone who takes out these loans frequently, and he's always dogged with phone calls from collectors (but I don't know of the collectors are with the payday loan company or if they're someone else). this guy makes pretty good money, but he has an ex-wife and son, and a new wife and another three children, so his situation is completely self-made. I've never had to resort to taking a payday loan myself. I hocked my guitar amplifier for one week about 18 years ago, but I've otherwise pretty much been able to at least get by. from my point of view, the people doing the borrowing are just as responsible for their situation as the payday lenders that profit from them. it's not a very ethical business to run, but I don't think it should be made illegal. Link to comment Share on other sites More sharing options...
Alaska Darin Posted August 14, 2014 Share Posted August 14, 2014 It seems to me the big problem is that people get on this revolving door where they are taking the payday loan every week because once they are broke, they can't pay back the loan and fund expenses till the next paycheck. Now you're talking hundreds of dollars per year for someone who can't afford that at all. I once taught a few basic personal finance seminars to minority kids; one group was just hanging on till high school graduation, the other were all college kids. Even with the college kids, the lack of even the most basic understanding of personal finance was astounding. These kids understood money less than what you'd expect from your 9 year old. It's criminal that our education system includes absolutely nothing at any level about personal finances. Bingo. Welcome to public school education. Create drones who can't care for themselves. Teach them to vote Democrat. Voila! Link to comment Share on other sites More sharing options...
DC Tom Posted August 14, 2014 Share Posted August 14, 2014 Bingo. Welcome to public school education. Create drones who can't care for themselves. Teach them to vote Democrat. Voila! I don't know that personal financial management could be taught in public schools in this society anyway. Not when everyone has a "right" to cheap, easy credit and prioritizes needs such as iPhones, wide-screen TVs, and premium cable over such luxuries as food or shoes. Link to comment Share on other sites More sharing options...
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