Posted on 12/01/2006 10:30:23 AM PST by shrinkermd
Cash-starved Americans, many of them serving in the U.S. military, are watching an increasing crackdown on one of their most frequent sources of last ditch credit - payday loans.
Even Congress has clamped down on the practice, but a spokesman for the payday loan industry Thursday told Cybercast News Service that criticism of the loans is being led by "elitist" consumer groups whose members "never have to go paycheck to paycheck."
Payday loans allow individuals to stay financially afloat between paychecks. They are short-term cash loans in which the borrower often hands over electronic access of their bank account to the lender so the lender can then gain access to the borrower's deposited paycheck to get repaid.
Huge finance charges can accumulate from payday loans since the borrower has the option of renewing or "flipping" the loan in exchange for another fee. Critics of the industry also say millions of people take out multiple loans, paying one loan with the proceeds of another and end up getting caught in a financial trap.
In September, Congress passed an amendment to the Defense Department Authorization bill, creating a 36 percent cap on interest rates that members of the military can be charged on loans. A Virginia state legislative committee next week is also expected to take up legislation that would produce more restrictions on the industry.
(Excerpt) Read more at cnsnews.com ...
Those places are nothing but legalized loan sharks.
If I should ever get into a car accident, I will be sure to blame the damn road.
Good scam if you're the one-side....
ain't the payday loans, but abuse of them - people making their own bad decisions.
Nah - it's the car manufacturer........
Exactly. Nothing much said here that indicates the reason they're "the poor" is in large part because they managed their money so badly in the first place, nor is much said about the fact that although almost everyone warns against these "payday" loans, they still apply for them.
Some might actually these high interest rates "supidity tax."
Title loan places are just as bad, if not worse, plus their TV commercials are painful to watch.
One of the things that can help alleviate this problem is to reinstitute the practice of not allowing a servicemember to Marry before they reach a certain rank. (Usually Sgt/E-5)
There were far fewer financial issues amongst the troops when this was in effect.
"supidity tax.""
I thought that was called "the lottery".
Isn't Gary Coleman one of their spokespeople?
I've been in a position, from time to time, to help the poor- in so far as we could. The way they allocate resources leaves no doubt as to why they have nothing.
This is call USERY and comdemmed in the bible and in most cultures. They need to be shut down they prey on hte young and ignorant.
I see the damage payday lenders do on a weekly basis. We are trying to educate our young Marines(the people most suceptible to these crooks) that they have numerous, and better options than payday lenders. It's hard when these guys set up shop right outside the gates. Get your hands on one of these payday lender contracts and read it thouroghly, it will shock you how much they gouge people. These lenders also encourage customers to roll the loan over, this is when the customer pays only the interest on the due date and continues the loan untill the next payday. Payday lenders are vermin!!
What's ironic about calling the high interest rates "stupidity tax?" They are warned over and over about these kinds of loans, yet, they go out and get them. If someone ignores all the warning signs about quicksand, and still walks into it, what is that if not stupidity?
One thing that might help is learning simple math (not "fuzzy" math!) in schools, but for some, not even that would help.
We ARE responsible for our own acts, and that includes making bad decisions. When we goof up, we pay the stupidity tax.
One of our locals wrote a letter to the editor of our daily fishwrap, last week. Here in Arkansas, payday loans are a hot topic. He says one of his daughter's payroll checks had bounced, a few weeks ago, causing her to have several checks bounce, at her local bank. As a result, several checks that she had written bounced, as well, and she incurred nearly $500 in service charges from her bank at $29.00 per check. He wondered which entity was worse; the payday loan industry or banks with "virtual loans" to cover overdrafts. I wonder, too. I suppose the banks charging these outrageous fees are the more legitimate of the two because they have larger buildings in prime locations.
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