payday lenders - good riddance

[Just Jack]

 

 

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.

 

I can't find one of my agreements showing the interest rate, I think they listed the APR on it in the thousands of percent, but searching through old emails I found one where I borrowed $500, and the interest due on that in two weeks was going to be $120. So my total payback in two weeks was going to be $620, IF I paid it back in full. If not, I still had to pay the $120 interest. Then two weeks after that, same scenario, $500 + $120. Rinse, repeat.

[Nanker]

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.

One would think that parents could/should have some talks with their kids about finances. I've tried with my kids, but as teens... they tuned out the old man. Now they're much more interested in things like budgets and finance.

 

I think a lot of parents don't try or don't know themselves how to deal with cash flow responsibly, yet alone add in all the societal pressures that DC Tom mentioned that screw up people's priorities, and add to that the never ending harangue that marinades the public in a sense of entitlement and it's pretty much a disaster of financial incompetence with tragic consequences for many.

 

Add to that the political dialogue of recent years that promotes class envy and conveniently skips over the root causes of poverty and offers "solutions" of making the "rich" pay their "fair share". It's gross pandering, disingenuous, and morally bankrupt for politicians to do that because they're not interested in making a difference in people's lives, just in maintain their power and their own personal wealth. But people seem to lap it up because they're more interested in a hand out than a way out.

[GG]

 

 

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.

 

Even though there's a lot of cash flowing through, it's not that great for laundering because they have to account for the funding sources. The cash goes in and out. The best money laundering is when the cash only goes one easy

[KD in CA]

One would think that parents could/should have some talks with their kids about finances. I've tried with my kids, but as teens... they tuned out the old man. Now they're much more interested in things like budgets and finance.

 

I think a lot of parents don't try or don't know themselves how to deal with cash flow responsibly, yet alone add in all the societal pressures that DC Tom mentioned that screw up people's priorities, and add to that the never ending harangue that marinades the public in a sense of entitlement and it's pretty much a disaster of financial incompetence with tragic consequences for many.

Well that's the cycle. Hard enough for you because of standard teen attention spans, but these people don't have any basic financial knowledge to even attempt pass along to their kids. So there's no point where they become educated and instead the kids grow up learning by example that the pay-day shack at the corner is the bank. And that's why I'm ok with some regulation/reform of these places. These places are crack and too many people are hooked.

 

Add to that the political dialogue of recent years that promotes class envy and conveniently skips over the root causes of poverty and offers "solutions" of making the "rich" pay their "fair share". It's gross pandering, disingenuous, and morally bankrupt for politicians to do that because they're not interested in making a difference in people's lives, just in maintain their power and their own personal wealth. But people seem to lap it up because they're more interested in a hand out than a way out.

Yup, and that is poisoning everything in our society (thanks Democrats!). There is absolutely no interest in empowering people with knowledge and understanding, much less responsibility. Hell, even the middle class is mostly ignorant about personal finance (see the "mortgage crisis"). There is almost no hope for the uneducated class.