Personal Loans Not A Problem, Government Interference In Personal Finance – Absolutely A Problem
Sharon L. Secor
May 26, 2008
Now that detailed studies have clearly demonstrated that, when compared to the cost of the forced short-term loans delivered by banks under the misnomer of "overdraft protection," the cost of such unsecured personal loans as the much maligned payday loan is not as exorbitant as it may have seemed when judged out of context, it is easier to focus on the more important issues associated with the surge in regulation efforts regarding personal loan options for consumers. Personal loans are not a problem, government interference in the personal finance decisions of adults is.
As laughable as it may seem, a government incapable of managing its own finances – as was aptly pointed out in an article written by Tim Miller and published in the Christian Science Monitor on May 6, 2008 – is, in many regions of the nation, attempting to inflict legislation that not only tells adults what type of personal loans they may seek, but also how often they may take out such loans. In some areas, government officials are trying to make it law that those seeking a certain number of payday loans within a set period of time have to attend financial counseling and education services.
Oddly enough, such paternalistic and insulting legislative attempts have many supporters. Apparently, many have forgotten the simple, basic concepts associated with the fundamental ideas associated with the founding of our nation – individual freedom and personal responsibility. The idea that the government has the right or even the obligation to tell grown-up people how to run their personal finances to the degree that they are told from whom they can borrow money and how frequently they can borrow it before being eligible to be mandated to participate in some form of a government re-education camp should be offensive.
While personal loans from banks may be an option for many people – though that number may be decreasing in light of the credit crisis and the tightening of lending standards – not everybody has that option. Many people without an established credit history, as well as those who may have damaged credit ratings or simply are of a lower level of income do not have the option of walking into a neighborhood bank and coming out with a personal loan. It´s interesting to note that often those supporting such legislation know little about the struggle to get credit, as they tend to be fairly financially secure and without such concerns.
As is so often the case with such legislation – the sort of legislation aimed at those on the lower levels of socio-economic measures – the overall tone is that of saving the poor from the ignorance and irresponsibility that their so-called social and economic betters assume is part and parcel of their lower socio-economic status. After all, if they weren´t so financially and otherwise ignorant and irresponsible, they´d have good enough credit to obtain personal loans through banks. Hell, if they were better educated and handled their money better, they wouldn´t need cash loans at all.
The only legislation that should be associated with obtaining personal loans, whether through traditional means or outside of the usual financial institutions are laws designed to prevent fraud and to ensure that the terms of the loan, including interest, fees and all other associated costs, are set out clearly to the consumer. People have a right to make their own financial decisions and if an adult chooses to pay the costs associated with an unsecured personal cash loan, it is entirely their own business.
As laughable as it may seem, a government incapable of managing its own finances – as was aptly pointed out in an article written by Tim Miller and published in the Christian Science Monitor on May 6, 2008 – is, in many regions of the nation, attempting to inflict legislation that not only tells adults what type of personal loans they may seek, but also how often they may take out such loans. In some areas, government officials are trying to make it law that those seeking a certain number of payday loans within a set period of time have to attend financial counseling and education services.
Oddly enough, such paternalistic and insulting legislative attempts have many supporters. Apparently, many have forgotten the simple, basic concepts associated with the fundamental ideas associated with the founding of our nation – individual freedom and personal responsibility. The idea that the government has the right or even the obligation to tell grown-up people how to run their personal finances to the degree that they are told from whom they can borrow money and how frequently they can borrow it before being eligible to be mandated to participate in some form of a government re-education camp should be offensive.
While personal loans from banks may be an option for many people – though that number may be decreasing in light of the credit crisis and the tightening of lending standards – not everybody has that option. Many people without an established credit history, as well as those who may have damaged credit ratings or simply are of a lower level of income do not have the option of walking into a neighborhood bank and coming out with a personal loan. It´s interesting to note that often those supporting such legislation know little about the struggle to get credit, as they tend to be fairly financially secure and without such concerns.
As is so often the case with such legislation – the sort of legislation aimed at those on the lower levels of socio-economic measures – the overall tone is that of saving the poor from the ignorance and irresponsibility that their so-called social and economic betters assume is part and parcel of their lower socio-economic status. After all, if they weren´t so financially and otherwise ignorant and irresponsible, they´d have good enough credit to obtain personal loans through banks. Hell, if they were better educated and handled their money better, they wouldn´t need cash loans at all.
The only legislation that should be associated with obtaining personal loans, whether through traditional means or outside of the usual financial institutions are laws designed to prevent fraud and to ensure that the terms of the loan, including interest, fees and all other associated costs, are set out clearly to the consumer. People have a right to make their own financial decisions and if an adult chooses to pay the costs associated with an unsecured personal cash loan, it is entirely their own business.
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