Remembering the Great Recession ended in June 2009,
WHY are the "demand for these loans doubled during the Great Recession, from 170,000 loans in 2007 to 350,000 in 2011",
BECAUSE the Jobless Recovery that started July 2009.
Well, the Pawn shops here are whittle pretty clean of inventory, seems more Minnesota Democrats are laughing after another hit and run on the private sector...seems pawn shops must now hold the merchandise they get for 90 days after the last payment. It used to be 30 days, which now the cost of storage will be another 60 days added to the customer price, because you know whose going to pay it, if it is even a feasible business model anymore.
And how about that clueless Minnesota Public Radio Daily Circuit host Kerri Miller, bragging about how Gov Dayton has improved the economy in Minnesota better than Scott Walker has done in Wisconsin, only to be punk'ed by her Republican guest because she wasn't aware Dayton had only improved the government sector, and probably as national Unemployment numbers, a manipulation has been done decrease the number of available jobs to show a decreasing Unemployment number. Some advice, sure to be ignored, better do your homework before being a hack for a Democrat, Ms Radio Talk Show Host. Next you could do a show on why "Demand for high-interest payday loans soars in Minnesota"...being Dayton has improved the economy so much...
Good! Let the fine people of Minnesota get exactly what they asked for.
Let's call it about 10% profit on the $100M they are sitting on to loan out after expenses, roughly ballparked.
My first car loan was in 82, and my bank at the time made way the hell more than that on what they loaned me per year, and they had the car as collateral.
I wonder what the default rate is, and how many they make that just up and close their account and walk away. Pretty high risk on what they do.
(I hate the practice myself, don't get me wrong, but there will always be a market for loans like this and a fool and their money will soon part no matter how much regulation they put in place)
There were some TV ads running recently from an Indian tribe that is in the payday loan business. The loans were unsecured up to 10K and I paused the screen to read the fine print - the interest rate was over 80%.
Loan Sharking.
Gov’t should give free lottery tickets instead of food stamps. /s
legal usury... and the RATS complain about credit cards, fehSomalis. Most of the 40,000 Somalis here don’t have regular bank accounts.
“In 2011, the top five industrial loan companies issued 247,213 loans totaling $98.7 million. Among them, Payday America, Unloan and Ace Minnesota earned about $6 million, $3.3 million and $1 million respectively from 2011 operations, according to their reports to the Commerce Dept. “
About a ten percent profit.
Doesn’t sound predatory to me at all.
Though it’s foolish to take any loan absent a compelling reason.
Hell’s Bells...if they cain’t get no Title Loan or a Payday loan, mebbe they can git one of them Western Sky Indian Casino loans...
Them bucks will loan you $500 straight up, no hokum. You jess gotta pay a $350 loan origination fee (meaning you gotta borrey $850), and then pay that simple interest at 342%.... After 12 easy payments of $150, you’ll have that loan paid right off! boy howdy!
I know a couple at work that are in management and perpetually broke. Why? Car from JD Byrider, big-screen/computer from Rent-A-Center, occasional payday loan, and a quarter oz of weed—every other day! Asked why they didn’t buy quantity, their answer was: ‘We’re broke’. Go figure...
Yet when some of these people get their income tax refund, they’ll blow every penny on a vacation or trip to a casino instead of saving it for future car repairs, medical expenses, etc.