Posted on 12/06/2006 12:31:23 PM PST by Lezli344
Cashiering payday loans? By Ryan Krueger Published November 24, 2006 -------------------------------------------------------------------------------- The recent outcry for a ban on payday lenders made me wonder how many of those pointing fingers ever tried to open one of the doors they want to kick down. Have they listened to a customer describe what is on the other side? The tasteful accusation at fancy dinner parties is that they prey on the low-income worker, trapping him into unsavory interest rates. The hosts need to ask the caterer or nanny used that same evening for their opinions. Up front, I must disclose a bias of my own. I know about preying on the uninformed -- those who have sold me their shares of a publicly traded payday lender. I am a professional money manager. And one of my favorite bets is on an extraordinary streak continuing -- the mismatch of capitalism versus Congress. Payday lenders are under severe scrutiny with potentially sweeping regulations from Congress to applause from pundits far more quoted than me. I wonder which one did the math on the $40 his daughter ATM'ed last weekend. More than $4 billion in ATM fees were paid last year. This "little" fee has not been declining like you may think. Bankrate.com found ATM surcharges have climbed 20 percent in the last two years alone.
(Excerpt) Read more at washingtontimes.com ...
The ATM providers have a lot more political power than the those for payday loans.
I'll bet most people don't pull these loans if they don't need them. Outlawing them, as scummy as they are, will hurt some people.
Nanny-stateism sucks.
Another proof that the left wants to do away with the free market economy. Every time that they interfere with it, they mess things up!
I haven't paid an ATM fee in years. If I need cash, I go to a grocery store and buy a pack of gum, and get $100 back. No fee.
But I see the fees like I see the payday loans: In a free country, if that floats their boat, who am I to stop them.
Besides, it is immoral to allow a fool to keep his/her money.
There is nothing new about payday loans. When I worked for a shipyard in 1960 the credit union made what we called 'drag' loans. If your time sheet showed you had been at work on Monday you could get money, in crisp, brand new $5.00 bills, on Tuesday. The basic cost of a drag loan was $5.00 as I recall. Even if all you got was $5.00 the deducted that $5.00 plus and $5.00 from your paycheck that Friday. I know lots of people who never got a paycheck for more than a few dollars. They would hit the credit union Tues. through Fri. and draw against their next paycheck.
As unsavory as these practices might seem the serve a valuable service to people who live paycheck to paycheck.
Especially a democrat controlled senate. LOL! This guy's good.
It's a lot easier for them to do than it sounds.
Excellent article!
If I may add to the list of crimes against us working stiffs....it's the dings we get on our credit reports when being investigated for employment, auto insurance or loans.
Why does the credit-ee have to pay (in a reduced Beacon score) for having his/her credit checked?
Where is congress on this issue ... and why don't they give a rats arse?
Is this true? My wife and I have been suspicious of something like this over the years.
<< I haven't paid an ATM fee in years. If I need cash, I go to a grocery store and buy a pack of gum, and get $100 back. No fee. >>
I did that (at gas stations) until the time I was driving between LA and my N-W Washington and a bunch of credit card crooks at a California gas station used my account details to clean out my current and savings accounts (they bought and had delivered scores of books from Barnes and Noble) and Bank of America then (The bank's primary responsibility, it insisted being to its commitment to the merchant and not to me, the owner of the money) took about eight weeks, one fraudulent Barnes and Noble transaction installment at a time, to return my money.
Worse, bad as I figgered BoA's approach to the scam to be and not withstanding my ATM card pretends to be a Platinum Visa, in fact banks have no obligation to refund money stolen via its debit cards.
I worked a little for a budget lender and say their books. It is as crooked a deal as you can imagine, only surpassed by the crookedness of the borrowers. Feel filthy just thinking about it.
How'd they get your pin?
I have a problem with people dumb enough to get caught in this. Oh I know how easy it is to be seduced into gettign paid early, but if you don't read what you're getting into, then it isn't my fault.
If they outlaw this, the lenders will think of something else, and the fools will line up to get fleeced.
<< How'd they get your pin? >>
Not that it's difficult to record that if you own and control the terminal, they didn't need my PIN. Simply used my Debit Card over the 'phone as a credit card.
Oh, I've had that happen. A hotel charged me for an extra nights stay two weeks after I left. It was reversed.
Interesting thing is that I've tried to use my card to order goods and ship them to relatives homes. They would only ship to the cardholders address.
<< They would only ship to the cardholders address. >>
With ever increasing numbers of crooks among us, the banks and the merchants are slowly becoming more responsible. But the merchant still has no obligation to return moneys criminally paid him by way of stolen, converted and/or fraudulently obtained debit cards.
Sometimes you can tell from your statements when they are doing it. They will "cascade" overdrafts...kinda' like a snowball rolling downhill and growing as it does so.
For a lot of banks, overdraft fees are a large component of their income.
They're certainly a last resort for anybody I know who've used them.
You're better taking a cash advance on a credit card than these loans if you can.
Cash advance loans don't HAVE to be paid back next payday (although you still should if you can,) and at 21% interest vs. 350% interest, it's a no-brainer.
Absolutely true. Particularly if several checks and deposits hit on the same day. Banks will clear the largest ones first, then the smaller ones, then the deposit. This causes the large check to clear and the smaller checks to all bounce at $20 a crack. Then the deposit goes in and a chunk of that is cleard out by covering the overdraft fees.
Not all banks do it but most banks that do batch transactions where all transactions for the day clear at once (my bank does it at noon for example) then you see this more frequently. My bank doesn't do largest check first but they do do all checks first then deposits.
Even if the deposit was put in post-batch the day before and the checks were put in pre-batch the day of the checks will clear first then the deposit on the next batch run.
See this on Bank of America:
http://en.wikipedia.org/wiki/Bank_of_America#Excessive_overdraft_fees
>>But the merchant still has no obligation to return moneys criminally paid him by way of stolen, converted and/or fraudulently obtained debit cards.<<
That is true, but if the card is processed as "credit", (it has the bug on the card or it is just an ATM card) the credit card company eats it. You are not responsible, provided you notify them within a reasonable time. I had 60 days to turn in a dispute on mine, and they put the money back in my account in three days.
BTW, I worked on the WaMu debit card conversion project - the first migration from VISA to MasterCard in history.
That's why I only use credit cards and will not touch a debit card.
<< That's why I only use credit cards and will not touch a debit card. >>
That's smart.
Back when I was robbed my BoA platinum debit and credit cards were almost indistinguishable one from the other and on a long drive - LA to Sedro-Woolley, Washington I got them mixed up at a gas station. One inadvertent use of one debit card was all it took and my (linked) checking and savings accounts were cleaned out.
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