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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

#171

Post by matt4077 »

skh wrote: post #42

If we amended the Constitution of the United States to state that only corporations count as people then our politicians would no longer be lying when they say they support the people. We would finally be living in a country in which the peoples' will is done and be a country in which the peoples' voice was regularly heard.

Don’t go down this road of destructive cynicism.

This issue is a good example: not “all politicians” are selling out citizen for company profit. There is one party that restricted predatory practices in lending, and the other party is now rolling this back.

I know there is plenty of criticism for every party, in every country, ever. You will never find a politician you completely agree with unless you run for office yourself.

But this specific example shows there are, indeed, two vastly different options available in US politics.

Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending

#172

Post by rayiner »

Angostura wrote: post #119
rayiner wrote: post #81

Earlier quoted context omitted.

And Facebook and Google want to get you locked in a cycle of mindless browsing and ad consumption. The difference is that Facebook and Google operate in markets with high barriers to entry resulting in fat profit margins. Payday lenders, by contrast, operate in a market with immense amounts of competition. There’s one on every block in most places. Payday lenders don’t lock people in cycles of debt. What looks people…

> If you take away that option, I don’t get my car fixed and lose my job. That’s the alternative. Except the rule that is being killed is the one that told lenders they needed to check to ensure that the borrower would be able to pay the loan back. In your case, with your car and your job, you would pass this test. And if you couldn’t then lending the money would put you in a worse position than immediate unemploymen…

> And if you couldn’t then lending the money would put you in a worse position than immediate unemployment

I’m glad some upper middle class attorney or policy wonk at CFPB gets to make the decision that it’s better for me to lose my job than to deal with debt I can’t repay!

Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending

#173

Post by jopsen »

Why don't other countries have problems with payday lending?

My guesses: - People aren't as desperate - Lending can only happen though banks - Loans can't be given to you can't prove reasonable chance of repayment - You can't garnish people paycheck below a certain amount, so payday lender would never get any money.

Any other explanations?

Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending

#174

Post by kortilla »

firasd wrote: post #97
amvalo wrote: post #60

Earlier quoted context omitted.

Not clear to me what that quote is saying. Doesn't that just encompass any possible excuse?

He means that dressing it up as a virtue is worse than just admitting that you want to make a profit.

Same thing could be said about people wanting to make a living as a professional doctor. It’s a pretty dumb quote.

Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending

#175

Post by bedhead »

firasd wrote: post #31

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.”

If it is so awful, why do so many people use it? Most critics don't understand the depressing reality that payday lenders are often better than the alternative.

I would also point out that the companies vary in profitability, and they're not particularly good businesses. Default rates are so high that the lenders often generate returns on equity below many regular banks, or just on par.

Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending

#176

Post by stouset »

pitaj wrote: post #142
threeseed wrote: post #111

Earlier quoted context omitted.

Nobody is necessarily saying get rid of payday loans. Only that they are heavily regulated to ensure that (a) consumers are fully informed, (b) no lending occurs to people who can't afford them and (c) interest rates are capped to reasonably levels.

Doing that still means restricting the options people have

Yes, that would be the point of regulation.

Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending

#177

Post by stouset »

pitaj wrote: post #162
Bud wrote: post #128

Earlier quoted context omitted.

You don't actually know, pitaj, that those people are not better off. You just made that up. I think the odds are much better that those protected from usury are, in fact, better off.

This is exactly what I was referring to by "elitism". If people were better off to not have the loans, why would they ever use them? You think you know better than these people, but you are not in their situation. Perhaps instead of restricting options, you should offer free poverty counseling or something. Expand people's options, don't restrict them.

If people are better off not falling for scams, why do they ever fall for them?

Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending

#178

Post by rayiner »

thaumaturgy wrote: post #123
rayiner wrote: post #81

Earlier quoted context omitted.

And Facebook and Google want to get you locked in a cycle of mindless browsing and ad consumption. The difference is that Facebook and Google operate in markets with high barriers to entry resulting in fat profit margins. Payday lenders, by contrast, operate in a market with immense amounts of competition. There’s one on every block in most places. Payday lenders don’t lock people in cycles of debt. What looks people…

> Payday lenders, by contrast, operate in a market with immense amounts of competition. There’s one on every block in most places. This is very peculiar reasoning. Why did you go with, "payday lenders must be struggling to provide crucial services because there's one on every block", instead of, "there are payday lenders on every block because it's a stupidly profitable business"?

Because that’s literally the opposite of how the world works? There are Chinese restaurants all over the place. Does that mean they’re wildly profitable? There are a lot of payday lending places because there is a lot of demand for them. And because there are so many, competition drives rates down to the efficient amount.

There’s lots of places where I’m not going to trust economic theory reflects reality. But this is an example of microeconomics out of a textbook.

Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending

#179

Post by fzeroracer »

towelr34dy wrote: post #160
fzeroracer wrote: post #148

Earlier quoted context omitted.

I mean despite your terrible sarcasm, we do have rational regulations on things like alcohol or gambling because we recognize that it helps protect people overall, sometimes indeed from themselves. Your argument is essentially 'I don't drive drunk, therefore we don't need any laws against drunk driving' since the expectation is that people will behave rationally. Or that we don't need regulations against things like…

Err, we do have payday lending regulations. The new ones would basically destroy the industry. It would remove the vast majority of lenders of last resort. It wasn't just capping fees. It was 'making sure the lender could pay' Let's see, who else does that... banks. How? a credit score. Which has nothing to do with being able to pay truly pay long term or be sustainable. Some poor people have good credit. Some rich p…

I've spoken extensively here on HN about my experience growing up dirt poor; such as having to go through schooling with teeth quite literally rotting and broken down to the gumlines without being able to afford fixing them. So you arent exactly making a strong case for me here.

But to make an actual argument here instead of solely an appeal to my history: I know exactly how companies will behave when untethered from regulations. A great example is that banks would deliberately delay checks my parents would receive so that they could collect overdraft fees.

I don't have much sympathy for payday lenders given one of the regulations in the article was to prevent payday lenders constantly trying to withdraw money from accounts in order to collect on fees. And the regulations would've prevented payday lenders from deliberately giving poor people incredibly large loans that they could never pay back and be effectively stuck in debt with due to high fees. Acting like these regulations would've somehow stopped lenders is wrong at best and fearmongering at worst.

Re: Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending

#180

Post by stouset »

candiodari wrote: post #120
pitaj wrote: post #63

Earlier quoted context omitted.

Many people make use of payday loans. If you remove that option, those people aren't any better off. Restricting or prohibiting payday loans is politicians saying they can make better choices than the people they're claiming to help. Does it come from good intentions? Of course. But it's also fundamentally elitist.

Ever notice how that's the entire premise of leftist thought ? "Let's just restructure society the way we see as better", and then the addendum "not by helping - of course, by force of punishment" once politicians come into it. I wish we went back to the left of the 90s. No more "you can't do X - bad for climate", "you can't do Y - bad for the poor", "you can't do Z - bad for the children". I want the left back of nu…

Constructing straw men and tearing them down might make you feel superior, but I hope you come to realize that it does absolutely nothing to convince anyone who doesn’t already share your viewpoint.
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