Lawmakers Fine With Their Hands In Your Pocket Seek To Limit Payday Loans
Sharon L. Secor
March 17, 2009
It is amazing how federal and state lawmakers are able to decide that an American´s free choice to enter into a business agreement with a payday lender should be legislated away, while at the very same time funneling trillions of taxpayer money into propping up their cronies and political campaign contributors in the financial industries. That´s right, they can steal your money, your children´s money, and your grandchildren´s money so that banks and lenders won´t have to face the consequences of their greedy, high risk choices, but want to protect you from the interest rates on payday loans.
While the average taxpayer, unless – like Treasury Secretary Timothy Geithner -- you´ve been chosen for high office in the administration, faces the potential of going to prison for not paying the government´s ever-increasing demand for taxes, when it comes to payday loans, you have the right and responsibility to look over the terms and conditions, including associated fees and interest rates, and decide if you want to enter into the agreement. Has anyone asked you if you want to give thousands upon thousands of dollars to the government so that Wall Street financiers can continue to receive fabulous bonuses ?
Heck, studies have revealed that a payday loan taken out and paid on time is less financially offensive than those rapacious, often manipulated to your disadvantage overdraft fees, mockingly referred to as overdraft protection by your local bank . As if charging you $35 for loaning you 57 cents instead of just denying the transaction is any protection at all!
However, although we hear legislative mutterings about how this abusive bank behavior should be stopped, how much solid progress have we seen? That´s right… very little. Instead, we are treated to a continued legislative assault on the right of an adult American to decide whether or not a short term, cash personal loan with what may seem to him to be a reasonable fee for the convenience of having the cash necessary to deal with an emergency is the right credit option for his particular situation.
According to a March 11, 2009, Associated Press article published on Forbes.com , Idaho lawmakers are considering a bill that would "require payday lenders to give consumers a list of credit and debt counseling services and would create an optional payment plan for borrowers who can't pay off the loan." Kentucky, as reported by the Courier-Journal on March 13, 2009, are hoping to prevent new payday lenders from opening in the state for 10 years in addition to creating a database to make it easier to track lending and enforce the laws that do not allow consenting adults to decide to have more than two loans totaling $500 at a time. With a data-base to keep tack of loans, they can "sanction offending lenders."
South Carolina is another state trying to limit payday lending. Some of the changes in the law that are currently being considered include "adding a 7-day "cooling off" period between loans," capping loans at $600, and creating a data-base to ensure borrowers only have one loan at a time. Even the federal government is getting on the anti-payday loan bandwagon, with Sen. Dick Durbin (D-IL) proposing a bill that would cap interest rates on payday loans.
There is one thing that they say that is correct – payday loans are often the refuge of those with lower income or poor credit. For, despite the additional tax burden of bailing out the banks, the amount of money sucked out of school systems and other far more important uses for tax dollars to be given to bailing out banks, and after finding themselves with challenged credit after years of being used and abused by banks and their fee-sucking, greedy ways, walking into a bank for a personal loan simply isn´t an option for many of the people using payday loans. Does being poor or lower income cancel out your right to make your own decisions?
Banks can take insane risks, dealing in debt leveraged to just crazy heights, making wild and exotic investments, and the whole nation is expected to hand them money when it all goes terribly wrong, not only expected to but forced to by rule of law, unless politically connected or working for the government, of course. Give them money and let them call the shots on how it is used for the most part, all after turning a blind eye to the risky behavior that got them to this point. Yet, state and federal governments feel driven to eliminate one of the few readily available credit options for those who have fewer options for borrowing because it may be somewhat riskier than the standard credit options. Simply amazing.
While the average taxpayer, unless – like Treasury Secretary Timothy Geithner -- you´ve been chosen for high office in the administration, faces the potential of going to prison for not paying the government´s ever-increasing demand for taxes, when it comes to payday loans, you have the right and responsibility to look over the terms and conditions, including associated fees and interest rates, and decide if you want to enter into the agreement. Has anyone asked you if you want to give thousands upon thousands of dollars to the government so that Wall Street financiers can continue to receive fabulous bonuses ?
Heck, studies have revealed that a payday loan taken out and paid on time is less financially offensive than those rapacious, often manipulated to your disadvantage overdraft fees, mockingly referred to as overdraft protection by your local bank . As if charging you $35 for loaning you 57 cents instead of just denying the transaction is any protection at all!
However, although we hear legislative mutterings about how this abusive bank behavior should be stopped, how much solid progress have we seen? That´s right… very little. Instead, we are treated to a continued legislative assault on the right of an adult American to decide whether or not a short term, cash personal loan with what may seem to him to be a reasonable fee for the convenience of having the cash necessary to deal with an emergency is the right credit option for his particular situation.
According to a March 11, 2009, Associated Press article published on Forbes.com , Idaho lawmakers are considering a bill that would "require payday lenders to give consumers a list of credit and debt counseling services and would create an optional payment plan for borrowers who can't pay off the loan." Kentucky, as reported by the Courier-Journal on March 13, 2009, are hoping to prevent new payday lenders from opening in the state for 10 years in addition to creating a database to make it easier to track lending and enforce the laws that do not allow consenting adults to decide to have more than two loans totaling $500 at a time. With a data-base to keep tack of loans, they can "sanction offending lenders."
South Carolina is another state trying to limit payday lending. Some of the changes in the law that are currently being considered include "adding a 7-day "cooling off" period between loans," capping loans at $600, and creating a data-base to ensure borrowers only have one loan at a time. Even the federal government is getting on the anti-payday loan bandwagon, with Sen. Dick Durbin (D-IL) proposing a bill that would cap interest rates on payday loans.
There is one thing that they say that is correct – payday loans are often the refuge of those with lower income or poor credit. For, despite the additional tax burden of bailing out the banks, the amount of money sucked out of school systems and other far more important uses for tax dollars to be given to bailing out banks, and after finding themselves with challenged credit after years of being used and abused by banks and their fee-sucking, greedy ways, walking into a bank for a personal loan simply isn´t an option for many of the people using payday loans. Does being poor or lower income cancel out your right to make your own decisions?
Banks can take insane risks, dealing in debt leveraged to just crazy heights, making wild and exotic investments, and the whole nation is expected to hand them money when it all goes terribly wrong, not only expected to but forced to by rule of law, unless politically connected or working for the government, of course. Give them money and let them call the shots on how it is used for the most part, all after turning a blind eye to the risky behavior that got them to this point. Yet, state and federal governments feel driven to eliminate one of the few readily available credit options for those who have fewer options for borrowing because it may be somewhat riskier than the standard credit options. Simply amazing.
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