The Consumer Finance Protection Board, which I am sure you recall was formed in response to the 2008 financial crisis has turned its gaze towards payday lending.
Curious. Borrowers often have to take out new loans to cover interest payments on existing loans. Occasionally, a borrower's profligacy leads to what in other circumstances is called "unpleasant monetary arithmetic." This is when interest payments exceed tax receipts. When this happens to a government, someone has to get stiffed. Often, it's the taxpayer that takes the hit.
I remind you that the borrowing and the interest due is but a symptom. The underlying issue is that borrowers earn too little relative to their expenses. All the CFPB regulation they can muster won't do a thing to remedy the actual problem. All they can do is oblige would-be lenders to accept an otherwise unpleasant BATNA. Which for some people will include repossession, eviction, bankruptcy, or God forbid, turning to organized crime.
Eh, maybe that's the point. Perhaps the CFPB's telos is to punish those wicked citizens who have the temerity to be poor and desperate. If that's the case, this decision makes complete sense. And I'm sure they have all the backing they need from those constituents so blessed by Providence that they never need solicit the aid of strangers.
h/t M-Rizz
Showing posts with label payday loans. Show all posts
Showing posts with label payday loans. Show all posts
Monday, February 9, 2015
Sunday, September 22, 2013
Usury or Euvoluntary?
Story in NYTimes on "payday" loans.
Ripping people off? Or valuabe market service for the truly desperate?
And, there's more in the story...What about THIS transaction, also described in the editorial?
Avery describes the way that cabdrivers would purchase SNAP food stamp cards — at half their face value — from homeless men desperate for cash to buy liquor or drugs.
Other homeless men, who qualify for a meager supplemental-security stipend, took advantage of people with even less money, using their S.S.I. income to buy cartons of cigarettes that they then sold to their fellow homeless men for 50 cents a cigarette.
As Avery dove deeper into his research, he came to see the organization of society as a whole “like layers on a cake, with those at the highest level of each layer exploiting those below.”
Would it really benefit the guys who are buying the cigarettes if those transactions were prevented?
Ripping people off? Or valuabe market service for the truly desperate?
And, there's more in the story...What about THIS transaction, also described in the editorial?
Avery describes the way that cabdrivers would purchase SNAP food stamp cards — at half their face value — from homeless men desperate for cash to buy liquor or drugs.
Other homeless men, who qualify for a meager supplemental-security stipend, took advantage of people with even less money, using their S.S.I. income to buy cartons of cigarettes that they then sold to their fellow homeless men for 50 cents a cigarette.
As Avery dove deeper into his research, he came to see the organization of society as a whole “like layers on a cake, with those at the highest level of each layer exploiting those below.”
Would it really benefit the guys who are buying the cigarettes if those transactions were prevented?
Friday, March 1, 2013
PayDay Loans, Part N
A recurrent topic here at EE: Payday loans.
A survey on why people use payday loans, from the NYTimes.
Money quote:
The loans are typically viewed as helpful for unexpected bills or emergencies. But the Pew report found most payday borrowers are dealing with persistent cash shortfalls, rather than temporary expenses. Just 14 percent of borrowers say they can afford to repay an average payday loan out of their monthly budgets... Even though borrowers complained that they had difficulty repaying the loans, most agreed that the terms of the loans were clear. So why do they use such loans? Desperation, according to the report: “More than one-third of borrowers say they have been in such a difficult situation that they would take a payday loan on any terms offered.”
So, the solution is obvious? Right? Take away from desperate people the only legal option available to them, forcing them to borrow from loan sharks. Wait, that can't be right. But it is true that using payday lenders is apparently NOT euvoluntary.
A survey on why people use payday loans, from the NYTimes.
Money quote:
The loans are typically viewed as helpful for unexpected bills or emergencies. But the Pew report found most payday borrowers are dealing with persistent cash shortfalls, rather than temporary expenses. Just 14 percent of borrowers say they can afford to repay an average payday loan out of their monthly budgets... Even though borrowers complained that they had difficulty repaying the loans, most agreed that the terms of the loans were clear. So why do they use such loans? Desperation, according to the report: “More than one-third of borrowers say they have been in such a difficult situation that they would take a payday loan on any terms offered.”
So, the solution is obvious? Right? Take away from desperate people the only legal option available to them, forcing them to borrow from loan sharks. Wait, that can't be right. But it is true that using payday lenders is apparently NOT euvoluntary.
Wednesday, August 29, 2012
Payday Loans
Usury is a sin. Dante counted it as a sin of violence and put usurers in the 7th Circle of Hell, noting especially his revulsion with the craven moneylenders, which contrasts interestingly with some admiration he retains for sodomites a few rings over and compassion for some souls in the Wood of Suicides. Even set against murderers, harvesters of interest are portrayed in The Inferno as worthier of scorn. Usury is an act of violence against dignity and industry, according to Dante's interpretation and I have a hunch that his beliefs are still pretty widespread.
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