Consumer Protection Bureau Aims to Roll Back Rules for Payday Lending • Hacker News Board

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

#271

Post by carbocation » Thu, Feb 07, 2019, 3:11 PM UTC

patio11 wrote: post #255

carbocation wrote: post #27

Earlier quoted context omitted.

Payday loans are some of the things that the unbanked turn to . Using a payday loan shark does not make one banked.

Payday loans structurally require you to be banked. The offering is "I will advance you $400 in cash today for a $415 check dated in a week. You can come back and buy your check back for $415. If you do not, I will deposit it." The security here _is the check drawn on your checking account_; without that the payday loan has markedly higher collection costs and markedly lower probability of collection. Also, they use…

I am not at all an expert in this field, and this kind of topic seems closer to things you've thought about for years.

But, I was under the impression that people who use payday loans and have bank accounts are considered "underbanked," while those who truly have no bank accounts are considered the "unbanked."

Maybe the distinction doesn't matter that much. In truth, I don't know enough to have a strong opinion.

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

#272

Post by towelr34dy » Thu, Feb 07, 2019, 4:44 PM UTC

thaumaturgy wrote: post #159

towelr34dy wrote: post #141

Earlier quoted context omitted.

How dare consenting adults do things I find offensive. I don't drink. Drunk people act stupid. Let's ban alcohol. It'll be great. Prove to me it won't! Oh, you enjoy alcohol responsibly? That's just anecdotal. Not like MY anecdotal evidence, I see drunks everywhere... everyone knows that. And they are all alcoholics who are depraved by predatory beer companies. My anecdotal evidence is good and corroborated by my tri…

Likewise, I find any and all laws criminalizing common scams to be gross and onerous. I would rather live in a free society, where I'm sure everyone would educate themselves and never fall for these scams, and if they did fall for one, then clearly the scam was good for them and they got something they wanted in exchange. Who are we to try to prevent that?

By your logic, most credit cards are a scam.

I think you need to look up the word scam. Then use words based on the dictionary definition of them the way the rest of us do. It helps in communicating when people use a dictionary to define words instead of the thoughts in their head.

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

#273

Post by towelr34dy » Thu, Feb 07, 2019, 4:47 PM UTC

quickben wrote: post #196

towelr34dy wrote: post #58

Earlier quoted context omitted.

I've had to take out loans for my business that were at usury rate. It saved me. If it wasn't there, if it was regulated out of existence; I'd have gone to a shark. I was not going to let cash flow cause me failing. Having said that, I'm very happy there was a lender of last resort that won't break my legs. Despite them screwing me in fees. Honestly, I've never understood people who suffer from legislitis: They see a…

>"I'm very happy there was a lender of last resort that won't break my legs" All of your support and encouragement of a superbly predatory practice comes from that line. You were happy that nobody broke your legs. Do compare that with the history of slavery, where outside of conquest, people became slaves because they couldn't fulfill their financial obligations. > "I mean, no where do they seem to be hinting at crea…

Ah the outrage mob.

So tell me, oh wise one; how do you deal with people who need a lender of last resort?

I mean, in your kind, humanitarian and knowledgeable opinion that takes into consideration the reality of people with cash flow issues?

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

#274

Post by darkpuma » Thu, Feb 07, 2019, 5:49 PM UTC

leetcrew wrote: post #270

darkpuma wrote: post #72

Earlier quoted context omitted.

With modern advances in law enforcement techniques for dealing with organized crime, the legality of state run lotteries should be revisited. The continued operation of numbers games in immigrant communities probably has more to do with inadequate policing in those communities than it has to do with lack of awareness for state lotteries.

if you can only funnel people into the state sanctioned lottery by increasing enforcement in immigrant communities, doesn't that imply the numbers games in those communities are offering better odds than the state implementation? if so, what exactly is the state monopoly protecting us from?

> "doesn't that imply the numbers games in those communities are offering better odds than the state implementation?"

No. It would imply that if you assume those number games are honest or that players can rationally and accurately assess the honesty of those number games. Neither of which is true. Why do you think the Nevada Gaming Control Board exists? Because organizations that run gambling operations cannot be trusted to stay honest, and because libertarian theories about consumers figuring everything out themselves and regulating the industry through market forces don't play out in reality. Government regulation is the only way to keep the gambling industry honest. The only other option is to tread on those snakes and stamp it out completely.

> "if so, what exactly is the state monopoly protecting us from?"

Fraud in the number games themselves, and the adjacent violence associated with criminal gangs who run numbers games.

> "increasing enforcement in immigrant communities,"

This is something we should be doing no matter what policy towards gambling is decided on, because immigrant communities are entitled to the same quality of policing as any other community. The status quo of denying adequate policing to many of these communities is a social injustice.

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

#275

Post by CydeWeys » Thu, Feb 07, 2019, 5:50 PM UTC

jessaustin wrote: post #238

CydeWeys wrote: post #224

Earlier quoted context omitted.

Well for one, there's more than an order of magnitude difference between the interest rate charged on credit cards and the interest rate charged on payday loans. So putting an emergency on a credit card is a >10X better option than using a payday loan. You can essentially borrow money at a rate of around 2% per month that way.

Yes there is a difference and that's why these borrowers can't get a credit card. (If the rules for credit card interest rates were relaxed, they could, not that I'm advocating that...) It is trivial to simply observe that some borrowers pay higher rates than others.

The question boils down to, where should the line be drawn as to how badly of a deal someone should be able to opt themselves into.

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

#276

Post by towelr34dy » Thu, Feb 07, 2019, 6:03 PM UTC

jakelazaroff wrote: post #206

towelr34dy wrote: post #58

Earlier quoted context omitted.

I've had to take out loans for my business that were at usury rate. It saved me. If it wasn't there, if it was regulated out of existence; I'd have gone to a shark. I was not going to let cash flow cause me failing. Having said that, I'm very happy there was a lender of last resort that won't break my legs. Despite them screwing me in fees. Honestly, I've never understood people who suffer from legislitis: They see a…

> So then they decide to: Ban the bad thing people do for relief when they are desperate. All while not ameliorating the suffering that cause the desperate bad relief efforts. There's another option, of course: create regulations to limit only the harmful effects of the thing. It's not like there's some law of economics that says we can't find a way to make loans accessible to people who need money without also enabl…

Except... we have regulations. It's state by state. Meaning, the laws adapt to the needs of the people of each state.

The new laws would have removed 90% of the industry, including my ability to have participated.

I fully supported the limitation of debiting end user accounts, which was part of the legislation.

I'm completely against the need to 'verify someone can pay'... which I read as basically requiring credit scores. Which again, don't really protect people as they have little to do with your ability to pay (just your previous history of payment)

I'm seeing this as filled with details that need to be considered and making decisions to support or oppose based on that.

But please, don't let details or getting to know what you are talking about get in the way of your decision to support something or not.

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

#277

Post by dang » Thu, Feb 07, 2019, 6:05 PM UTC

Bud wrote: post #138

calvinmorrison wrote: post #75

Earlier quoted context omitted.

Honestly, they're providing a service and there are customers. Walter block who is a noted austrian-school economist did a fun set of books called "Defending the Undefendable" where he runs through thought experiments about Slumlords, Payday Lenders, Pimps, etc. I'm not asking you to agree with him, or start defending pimps but reading through some of those is a fun way to get a different take on things. Book is avai…

Ah, yes, Austrian "economists". Some of the most-noted quacks in world history.

Could you please not post flamebait to HN? It doesn't matter how right you are, it damages the site.

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

#278

Post by towelr34dy » Thu, Feb 07, 2019, 6:09 PM UTC

thaumaturgy wrote: post #234

ghufran_syed wrote: post #228

Earlier quoted context omitted.

Same, I think I wrote about this before on HN, but I once had my bank freeze the funds in my account, while driving across the country with my kids. We would have ended up sleeping in a park if we couldn't use a 24-hour pawn shop (yay Las Vegas!) with a super-high interest rate to get some cash overnight to pay for the hotel. We paid it back the next day, and we're still super grateful it was available. When you ban…

It is unbelievably arrogant of so many people to keep ascribing motivations to other folks they haven't even talked to. Hey, it's great that a pawn shop helped you out in your case, where you didn't have a credit card or apparently any other option. That doesn't even a little bit offset the predatory nature of payday loan outfits, and they are predatory. I have no problem with people who want to loan money to other p…

Actually you are being viewed as arrogant not because you support the legislation.

I support one part of the legislation (limiting debits to user accounts).

I don't support another part of the legislation that would basically create a regulatory burden that would make payday lending more akin to credit cards.

As a thinking person, I research what I support and don't.

I look into whether what I support will actually help. This should apply doubly if I'm supporting congress to limit someone else's freedom to associate and engage in 'in state commerce'.

I'm supporting something based on my own personal experience.

Details matter. Let's not keep it at the level some people seem to not be able to get past: "pay day loan bad, people suffer, make illegal, people not suffer". This requires two assumptions: 1- all/the vast majority of pay day users are suffering because of they are stupid and NEED your smart help and 2: no one will offer pay day loans illegally and collect with a bat.

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

#279

Post by towelr34dy » Thu, Feb 07, 2019, 6:13 PM UTC

basementcat wrote: post #39

dawhizkid wrote: post #5

Isn'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 i…

I didn't know freedom meant people doing stuff that sucks.

Quote by someone.

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

#280

Post by towelr34dy » Thu, Feb 07, 2019, 6:15 PM UTC

potta_coffee wrote: post #66

dawhizkid wrote: post #5

Isn'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'm sure that some people can't afford to live and take these loans. I've also personally known people who take them because they're terrible at managing money, and they make impulsive choices.

So what should be done?