Comments on Payday pile-on

Why aren't these places already regulated by usury laws?

Good point (?uestion) Gitai, I would say is because Margarita Prentice as chairwoman of the Ways and Means Committee has made it her life's mission to derail bills that are opposed by the predatory lending industry. She is their best friend. With Margarita's help only bills supported by the industry get through the Legislature and the other Dems are too chicken shit to go against her. Margarita is almost ( not quite) like a politician from the show, The Wire.

People of color should boycott those places by not visiting them and by not working at them, either. We know these communties know how to organize; use that power!

Back in the day I lived on payday loans for about a good six months. I don't want to think how much money I paid them. Sad.

The problem with boycotting, and the reason these places thrive in the first place, is because people, particularly poor people, NEED THEM.

It's the only way a lot of people can get their paycheck cashed. Even if you have a bank account, which many, many poor people do not, the bank is going to hold your check for five working days before releasing the funds.

A lot of folks can't wait a week, so they go to the payday loan place and get cash on the spot, minus a hefty fee. But the fee is less onerous than starvation or eviction.

Address THAT problem, which none of the anti-payday-loan bills or lobbyists are doing, and the whole issue goes away. Pass the bill, and the payday joints go out of business, and poor people suffer even more.

I suppose that's an easy sentiment to express when you're not living hand to mouth. I'm going to guess that a single mother taking out a $200 loan at 400% interest isn't doing so because she wants to. Usually its their only option.

I'm normally not one for much regulation on the part of the government however this is one instance that I do support it. I hope there's a special place in hell for people who willfully exploit others in this manner.

FNARF, you ignore the problem that this just makes the poorest of the poor even poorer.

It's one of the reasons why the richest 0.1 percent of our population have seen their wealth and pay go up 212 percent per year since 2000, while the lowest 99 percent of our population (the majority) have seen their wealth and pay decrease.

There's a reason why moneylenders should be stoned. This is one of them.

Now, that doesn't mean they're evil, just predatory.

FNARF's position is similar to the IMF, turn poor nations even poorer, hire a few of its citizens and say, without us you cant really exist, so therefore it is important not to regulate us because we serve a need.

They can exist. They just want to make loanshark profits. And nobody is talking about shutting them down. Thats just not true, that is just their threat, its typical, its like when landlords yell against rent control, its just noise, theyre not going away, they have a niche and theyre not leaving, they just want to be able to charge outrageous fees. They can still make a profit with some needed regulation. Hell Margarita loves regulating Casinos and other stuff.

Why not just make loansharking legal.? People have to borrow to pay these people and it just preys on an underclass already sinking into debt.

I do agree that Banks share the blame because they abandon these communities and only return once they have been gentrified and well off citizens and homeowners return to once abandoned communities. But this notion that these legal loansharks or furniture rental places are a need and if they leave all hell would break lose, well that is not true, they are merely predators who saw a nitch and they should be regulated.

Fnarf,

Though I agree with the majority of your sentiments about these lenders providing a needed service, I can't muster the same compassion for the lenders that you do. If a 36% cap on interest rates means that they're going out of business, they're doing something wrong (besides financially raping the people who need it the least)

I'm sure the pay day lenders can still turn a profit on "only" 36 percent interest.

Fnarf @5 -

Actually, I'm pretty sure that banks are required to make money available immediately from payroll checks - so I don't think your argument flies.

Re #1: State usury laws have been toothless ever since the Supreme Court's 1978 Marquette Bank ruling, allowing banks to "export" consumer lending rates from one state to another. If a lender incorporates in a state with lax lending laws, like South Dakota or Delaware, they can follow those rules instead of local ones when they lend to people in another state.

Pretty obvious to me. Since the Democratics are in Power in Olympia, they could take over the industry and let the state do payday loans.

They would save overhead as every city/county/state building would be used. Since it would be a state "business" they would not have to pay taxes on the building or on "profits".
And State employees (paid for by your taxes) would be the ones behind the counter, so no employee cost! Bet the Democrat leadership could say "it didn't cost 400 percent to make loans!"
If the person getting the loan didn't come back, what the heck write it off.

I note it has worked with the Ferry system and medical care and welfare and......or has it? Hum....
My motto, "If you can't take it over, get out of the way!"
BTY I am not in that industry, I just mop up after everyone's mess.

OK, maybe you folks could go back and read what I actually wrote before getting all hot and bothered. I don't have ANY "sympathy" for the payday loan industry. I was just pointing out a simple fact: that poor people often DO, in fact, rely on these places. See Monkey @2. Yes, he was getting ripped off. But the alternative was not a great rate down the street, but no rate at all, and thus no cash at all, no food and no rent at all.

I've lived that way before, and it sucks. But at the time I had NO ALTERNATIVE. If you had removed the payday loan joint from the equation, I WOULD HAVE BEEN HOMELESS. There are a LOT of people who don't have bank accounts who CANNOT GET THEIR CHECKS CASHED ANY OTHER WAY.

The solution I proposed was to address THAT issue. The payday loan joints only prey on people because they don't have any alternatives. Getting rid of the payday loan joints altogether without giving people some other way to get their money is going to crush the life out of the very people you claim to be interested in protecting.

Seme, if you think loansharking is a bad deal, then go ahead and put the payday loan places out of business without providing any alternatives for poor people. Boom, the illegal loanshark business is going to EXPLODE.

Ahh, Fnarf, I can always count on you to be the voice of reason.

Please, Fnarf. Payday loan businesses are going to go out of business if only making 36% profit?!? That're ridiculous.

I think the usury rate laws don't apply (in addition to porting from other states) is because the loan companies make most of their money not by charging "interest", but rather "fees". They thus skirt around the law, which the proposed legislation would fix.

The problem with these companies is that poor people get caught in cycles where they *must* use these loanshark businesses to get money. We need better services for poor people so they can learn to (a) open bank accounts, and/or (b) cash the checks at the bank they are drawn from (no need for an account AND no fee).

@ 11,

Unfortunately, they only have to provide a small portion of it immediately. That doesn't help too much when it's the first of the month and all of the paycheck has to go to rent.

@11

I work for the largest single employer in the state of California, other than the State, and when I changed accounts within the same bank that I had been banking with for twelve years, they put a hold on my paycheck. The $100 they release wouldn't cover my cable bill, much less anything else. Adding further injury to injury, they did it two months in a row.

36% interest does not equal 36% profit, Him.

As for better services, yes, that's nice, but the people lined up outside Money Tree are not helped by people telling them they should get more services. They need cash, and they need it now. Those services are not in the proposed bill.

There was an article in the Eugene Register-Guard last year (5/8/2005) about credit unions in Oregon providing a lower interest alternative to payday loans. I wonder why they don't do that here in Washington?

Have I been missing something about banks?
Lets see, i get paid every two weeks, i go to bank deposit my check for 525 dollars and instantly can take it out of the machine or cash it ....no really. yes Its called a debit card. Oh and checks are usefull but they are old school. someone care to teach the poor about this system and trusdt it.
Bank of america works so do others. Stop using loan centers victims and , open an Account.
Oh, gee, I see they are needing the cash asap for paying back the drug dealer and dirty landlords they owe. The problem is that they are victims no matter where they Bank. Someone needs to teach them the system and how too use it to their advantage. The myth that Banks hold your money (maybe some-then don't open account there)for 5 days or so is BS. Our moneys good in the Bank why not theirs? unless they are upto something....?
Oh and make sure you bring your ID, address , only about a hundred dollars and negotiate(communicate) with bank and trust them and you will be fine. And work out a deal with your landlord on when your payday falls and you have no problem. Work under the table , big deal you can still make a deposit to bank account and withdraw it all immediately. Gee was I the only poor guy who knew about all this and the only one to use regular banking.
I used Loan places before and they suck...it was out od desperation to buy something immediately. It comes down to the money and thats about it. How bad do you need it?

Whenever I need to cash a check and want the money immediately, I go to the bank that issued the check and cash it there.

Under the Uniform Commercial Code which Washington State has adopted, the bank has to cash the check.

Of course, you should bring several pieces of photo ID and be prepared to give the bank a thumprint as part of their anti-fraud efforts which they are entitled to ask for.

Some banks do charge a fee for doing this. The last time I did it at Wells Fargo, it was $5.00. This is less than the 2.3% I would have had to pay a check cashing place for the $595 check ($13.69) and I didn't have to worry about the check bouncing.

There is also no excuse to not have a bank account in most major banks or credit unions (all of whom want your business), even if you travel. After one year, the amount that a bank can hold back drops.

And of course, there is that commie, pinko, radical concept of spending only what you earn and saving 10% for emergencies, gasp.

jonny730