Payday Lenders: regulate them?

Discussion in 'Politics, Religion, Social Issues' started by yaxomoxay, Mar 6, 2017.

  1. yaxomoxay macrumors 68000

    yaxomoxay

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    #1
    I found this interesting information on payday lander's interest rates across the states. Should we regulate them? How? (TX at 662%!!!)

    [​IMG]
     
  2. NT1440 macrumors G4

    NT1440

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    #2
    Of course we should, but in the south especially (the hotbed of predatory lending) these *******s directly fund many state legislators campaigns.

    The USA used to have usury laws....then we deregulated this industry. This is institutionalized loan sharking, nothing more.

    Allow the Post Office to do small community banking and you'll see this **** industry die a quick death. All they do is prey on the desperate, in much the same way the IMF and World Bank do, issuing loans that by design cannot be paid back with the absurd interest rates.
     
  3. ibookg409 Suspended

    ibookg409

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    #3
    I agree with the exception of letting the post office conduct community banking.
     
  4. NT1440 macrumors G4

    NT1440

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    #4
    Glad you do, but at the risk of a conversation that may be better suited to its own thread, why no community banking? It has been shown many times that poor areas don't have access to banking services (hence the rise of predatory banking in those areas) but everyone has access to post offices. It works in many other countries, so other than the GOP's hell-bent quest to destroy the post office (constitution be damned) to make a buck, what's the objection?
     
  5. Snoopy4 macrumors 6502a

    Snoopy4

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    #5
    They should be banned. There nothing that can't wait a few days and all it does is make the poor poorer.
     
  6. BoxerGT2.5 macrumors 68000

    BoxerGT2.5

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    #6
    The mob only charges you 2 1/2 points.
     
  7. shinji macrumors 65816

    shinji

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    #7
    But in the era of online banking, do we really need post offices to act as banks? How often do you go to the branch anyway?

    Anyone in a rural area or without easy access to a bank should just use an online bank, e.g. Ally, Capital One 360, Discover Bank, etc.
     
  8. Plutonius macrumors 603

    Plutonius

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    #8
    Should cigarettes, alcohol, gambling, etc. be also banned ?

    I think after a full disclosure to the person getting the loan and a max cap on the rates, it's pretty much up to the individual if they decide to get the loan. I don't care for this loan practice either but you can't legislate good sense.
     
  9. NT1440 macrumors G4

    NT1440

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    #9
    Poor people benefit from community banking (that's the whole point). Having the ability to bank online categorically excludes the poorest among us, because they don't have internet access (and if they did the subsidies that allow low income families to get affordable internet are being cut by this administration).
    --- Post Merged, Mar 7, 2017 ---
    The industry is rampant with fraud, which everyone knows, so the notion from the underlined is either a statement that you don't know that or a callous disregard for the decades long history of ******** from that industry.....
     
  10. s2mikey macrumors 68020

    s2mikey

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    #10
    I agree - the poeple using them need to NOT have this option since they've proven that they cant handle their finances properly. Its like putting slot machines on every street corner in a community filled with gambling addicts. BAD idea.
     
  11. oneMadRssn macrumors 68040

    oneMadRssn

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    #11
    Two things:

    - All banking / lending should be regulated. That said, it's not good if the regulation totally wipes out the market. While many companies are horrid and predatory, the idea of short-term cash loans is important to the economy.
    - These regulations should not be measured by annual interest rate. If you have the loan for a year, you're in trouble and are using the financial instrument incorrectly. Instead, I would support a regulation that prohibits a borrower from rolling a week-long loan over into another loan too many times; requiring certain minimum financial qualifications; etc.
     
  12. VulchR macrumors 68020

    VulchR

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    #12
    I have a PhD and I can't understand half the crap the bank spews my way in regard to terms and conditions of service. I shudder to think was uneducated people make of the banks' contracts.

    I know somebody who works in a bank in the UK on customer complaints. The majority of complaints arise when somebody takes money from a given customer's account each month leaving them bankrupt, but it turns out that on investigation these customers have received predatory loans, some of which with massively high APR's, and it is the banks bleeding them dry.

    Yes, these should be regulated, each customer should be shown an example of how much the loan will cost them, and no loan should be given unless there is documented evidence that the customer can pay it off and understands fully the nature of the loan.
     
  13. yaxomoxay thread starter macrumors 68000

    yaxomoxay

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    #13
    That's the thing. If someone wants to borrow money at a 23918% interest, be it. But I want to be sure, 100% sure, that things are clear upfront.
     
  14. samiwas Suspended

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    Atlanta, GA
    #14
    Most of the people who are using payday loan type places aren't exactly financial wizards. Most of them have no idea what is even going on. They just know that they ned some money and this place will give it to them Of course, you can rail on them all you want about how they need to educate themselves, but this is an industry that exists solely to exploit these types of people.
     
  15. NT1440 macrumors G4

    NT1440

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    #15
    Well, the CFPB was working on a rule requiring a 3 page explanation of what your loan would look like....and one party is actively trying to destroy that new institution...wonder why?

    http://files.consumerfinance.gov/f/documents/CFPB_Proposes_Rule_End_Payday_Debt_Traps.pdf
     
  16. s2mikey macrumors 68020

    s2mikey

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    #16
    I agree - it does feel like exploitation. But, these people do need to try and dig in and get into a better situation too. Im not saying everyone out there is going to be a nuclear physicist but you can work your way up or do *something* to better your position that doesnt require overpriced college study! ;)
     
  17. ibookg409 Suspended

    ibookg409

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    #17
    I'm against regulation. I say we just eliminate them.
     
  18. Desertrat macrumors newbie

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    Terlingua, Texas
    #18
    Trouble is, they're the lenders of last resort for those with lousy credit ratings. For some, the choice is to borrow from a payday lender or go to jail for an unpaid traffic fine.

    The interest rates are high because of the high risk to the lender as to repayment. A high percentage of customers renege on repayment. It's all well and good to have some abstract argument about interest rates, but the real question is the actual net profit of the business.

    Payday lenders deal with people whose credit rating number is near zero.
     
  19. NT1440 macrumors G4

    NT1440

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    #19
    And you're describing exactly why small community lending at Post Offices would be the perfect solution. Many countries do this for people in just such levels of hardship.

    https://www.theatlantic.com/busines...ers-lets-turn-post-offices-into-banks/411589/

    http://www.slate.com/articles/news_...worked_in_the_usa_and_it_will_work_again.html
     
  20. Plutonius macrumors 603

    Plutonius

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    #20
    They will always go to someone for money (i.e. loan shark, etc.) and it's better to at least have a place that can be held accountable.
     
  21. Desertrat macrumors newbie

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    #21
    NT1440, even for a no-profit operation, the interest rate would still have to be in what many see as an objectionably high rate--unless you're looking at it as more welfare subsidy.

    And you want to add more tax-paid employees to an already overloaded government system? USPS folks get paid more than many, many real-world people. Let the private sector make some profit so they can support the government drones.
     
  22. oneMadRssn macrumors 68040

    oneMadRssn

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    #22
    Paging Dr. Contradiction?
     
  23. Zombie Acorn macrumors 65816

    Zombie Acorn

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    Toronto, Ontario
    #23
    Ban them or cap the interest on short term loans to 12%
     
  24. kobalap macrumors 6502

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    Nov 30, 2009
    #24
    Huh? How do you eliminate them without putting regulations in place that say that they are illegal?
     
  25. mmomega macrumors demi-god

    mmomega

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    Location:
    DFW, TX
    #25
    We have a few cities in the DFW metroplex that just aren't allowing them to open anymore of these businesses within the city.
     

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