Anytime I see people defend this kind of practice, the John Ruskin quote comes to mind: “The dullest of all excuses for usury is that some kind of good is done by the usurer.”
Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending
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Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending
#32Isn't the problem less about predatory payday loans and more an existential issue around the fact that so many people can't afford to simply live ? People take these bad loans because they literally have no other choice. They are using these loans to buy groceries and cover bills, not splurge on non-essentials.
I saw a tweet [1] that followed a thread on the concept that paydays are not really a requirement any more -- it is totally possible with our existing banking infrastructure to pay salaries on a more continuous basis, but we've built up a huge amount of institutional momentum around the idea that running payroll is a complex and laborious process that we want to infrequently. By parallel in software engineering, bran…
Because the folks that use payday loans are most likely [a] not on a salary and [b] have very inconsistent wages due to inconsistent scheduling and [c] likely don't even have a bank account.
Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending
#33Isn't the problem less about predatory payday loans and more an existential issue around the fact that so many people can't afford to simply live ? People take these bad loans because they literally have no other choice. They are using these loans to buy groceries and cover bills, not splurge on non-essentials.
How many struggling people are spending $200+ monthly for overpriced cell and cable service?
Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending
#34I'm of the mind that many of these lenders are indeed predatory, but prohibiting loans to high-risk borrowers at realistic rates (based on the risk) just leaves them unbanked rather than poorly-banked.
I think the existence of these lenders is indicative of a larger problem and allowing them to profit in this manner brings very little benefit to anyone - better to address the mismatched cost of living and revive johnson's war on poverty
Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending
#35Isn't the problem less about predatory payday loans and more an existential issue around the fact that so many people can't afford to simply live ? People take these bad loans because they literally have no other choice. They are using these loans to buy groceries and cover bills, not splurge on non-essentials.
Sure, but which one is easier to solve: predatory payday loans or the unaffordability of life?
The instinct to want to solve the big problem is a good one, but it's a path to hell paved with good intentions. You'll end up struggling to ever solve the big problem, and ignore a series of effective, small fixes along the way.
Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending
#36Earlier quoted context omitted.
Arguably, the consumers that the CPB is protecting is those who are aware of the fees and conditions but still require payday loans, who would be excluded from consideration by the new rules [1], which do not change the interest rate requirements but exclude some customers from eligibility. If people didn't want these loans, the companies would not exist. If the loans were capable of being serviced at a lower rate, t…
This is an excellent point.
It's just one point though. Many of these comapnies engage in a very scummy behavior. Just read the linked PDF.
IRL, scummy behavior often gets you ahead of the honest competitors.
Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending
#37Isn't the problem less about predatory payday loans and more an existential issue around the fact that so many people can't afford to simply live ? People take these bad loans because they literally have no other choice. They are using these loans to buy groceries and cover bills, not splurge on non-essentials.
How many struggling people are spending $200+ monthly for overpriced cell and cable service?
Very few, the "welfare queen" idea is largely unsupported by actual evidence, despite chain emails claiming to document someone buying [luxury food] on food stamps.
Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending
#38Big benefit for payday lending companies who charge obscene fees mostly in poor and minority areas of the country. Which consumers is the CPB protecting?
Arguably, the consumers that the CPB is protecting is those who are aware of the fees and conditions but still require payday loans, who would be excluded from consideration by the new rules [1], which do not change the interest rate requirements but exclude some customers from eligibility. If people didn't want these loans, the companies would not exist. If the loans were capable of being serviced at a lower rate, t…
I have conflicted feelings about payday loans. When I was young and broke with no credit, I've used payday loans in emergency situations (medical bills, car failure etc). I knew full well I was being gouged but my only other options were illegal loan sharks or catastrophic failure (eg loss of job because no vehicle). I was happy to take the loan even at usurious rates.
OTOH in the payday office there were obvious addicts on benefits who were being skimmed every month and could never get ahead of their debt.
Does the need to protect vulnerable people who make bad choices outweigh my need for a high-risk emergency loan? It's not a straightforward ethical situation.
Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending
#39Isn't the problem less about predatory payday loans and more an existential issue around the fact that so many people can't afford to simply live ? People take these bad loans because they literally have no other choice. They are using these loans to buy groceries and cover bills, not splurge on non-essentials.
I think a component of the "problem" (if one considers this to be a problem) is the low level of financial literacy of a large part of the adult population. An ecosystem of a variety of lending products is wonderful for a population of educated consumers that make smart financial decisions.
It is painful for me to watch individuals who consistently make poor financial decisions spiral into providing the payday loan industry with a large amount of revenue. But is it really more painful than watching compulsive gamblers lose their pensions on card games or video poker or speculation on regulated index futures?
Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending
#40Isn't the problem less about predatory payday loans and more an existential issue around the fact that so many people can't afford to simply live ? People take these bad loans because they literally have no other choice. They are using these loans to buy groceries and cover bills, not splurge on non-essentials.
How many struggling people are spending $200+ monthly for overpriced cell and cable service?
How many are paying for unnecessary electric bills? Or cars? Or water when they could be digging wells like our forefathers did. Poor people should maintain a 16th century lifestyle.
/sarcasm /sorry