Letters to the Editor
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There is Nothing "Predatory" About Payday Loans
Unless of course you're a gibbering idiot who thinks you're getting "free money." It's a comfort knowing that those payday loan agencies are available, as I've availed myself of their services many, many times. In fact, back in '98 and early-mid '99, on more than occassion it was a payday loan that allowed me to pay my rent on time. Back then I was earning $41k before taxes, in Silicon Valley. That was like earning $10k just about anywhere else. If the slightest thing went wrong - hospital visit, car trouble - I was instantly in financial crisis.
But I never had to worry too much, because there were those nifty payday loans! I would never borrow more than exactly what I needed, and never put myself in the position of having my entire next paycheck swallowed up by what I borrowed. A few times I told my dealership or the hospital that I could pay XX amount for now, and the rest later, and they were willing to work with me. I would adjust how much I borrowed accordingly.
The truth is that payday loans are a God-send to anyone who is financially strapped but also responsible, and who knows how to manage not only their money but their debtors. The people who don't, sadly, end up in gigantic holes of their own making.
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I have been thinking about starting my own business...
I just couldn't decide what to do.
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States legislating APY caps
Something like 10+ states have or are looking into capping payday loans at 36% APY. I think for service members congress already passed similar legislation.
At least something is being done. Is 36% fair? I dunno, that is the same as missing payments and having your interest rate rest on a credit card.
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As a former member of this "exciting demographic"
called the working poor, I find the site too true to be laugh-out-loud funny. It gives me a stomachache, in fact. But I hope it is enlightening - and humorous, even - for those who have never been treated like as subhuman because they're living paycheck to paycheck. Or aren't quite. But I didn't get past the home page.
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Stil no legal limit on credit card interest though
Could be 50% or 100% or 1 billion%.
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Indeed Mister Marker
If only the wogs had half the self-restraint as a gentleman of you caliber, eh?
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Thank you Andrew Leonard.
I have been very poor. I once lived on $580 a month. I never succumbed to a payday loan. I was never even tempted. However, I am glad someone is satirizing this stuff. The more exposure the better.
I also enjoyed the walkable neighborhood site. A site such as that one is very useful to the poor because many of them cannot afford cars even in cities where it is almost impossible to get around without one. Once, when my car was broke, I had to take a bus to the doctor's office. In addition to walking half a mile while quite ill the city bus trip ended up being 45 minutes one way.
I expect the ranks of the working poor to expand. Already people with respectable occupations are beginning to really struggle. Illness, both mental or physical, poor health insurance, rising prices, and falling victim to predatory lending are causing people who have never been homeless vets, or drug addicts, or in any way lazy, to suffer. When they suffer, their families suffer.
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Rates
There is no excuse for those rip off rates. I can't believe anyone would be an apologist for those thieves. When you get down to it, most people are honest and it is very easy to blackball people who are not. Calculate the risk, add *reasonable* profit, and you are not looking at 36%.
Good for those guys. I am glad the landsharks have their panties in a twist. Unfortunately, it takes more than an e-wedgie for crooks and liars to grow a conscience.
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Mr. Marker says
There is Nothing "Predatory" About Payday Loans
Agreed. There is nothing predatory about payday loans, that is, if one is morally vacuous enough to ignore the usurious interest rates and the fact the foundation of the business model rests squarely on the cynical exploitation of the desperation of working poor. Absolutely. Nothing to see here but simple honest salt-of-the-earth business folk doing the Lord’s work.
Coming up next: Astonishing new research indicates regulating payday loans will irreparably harm the working class, and, how the founders of the payday loan industry were motivated exclusively by the altruistic desire to help the less fortunate.
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Brilliant! Now, for the next one...
Now, what we need is a similar Onionesque site that gives helpful hints for making a fortune by fleecing the feeble-minded credulous set. You know, the same gaggle of wooly-headed folks who do things like buy "The Secret" DVD, worthless dietary supplements, magnetic jewelry, lucky charms that neutralize "deadly" cellphone radiation, and who believe in all kinds of other creative quackery and MLM schemes.
If I had larceny in my heart, I'd immediatly craft a set of gadgets and market them to scientifically and ethically challenged idiots by preying on their fears and superstitions. The local "health fairs" are a great place to do this. It would be a cinch- I can concoct scientific-sounding gobbledegook with the best of them.
Fortunately, I prefer to make an honest living by doing real work.
Although I truly have mixed feelings about crafting laws to protect the gullible from their own stupidity, it could only benefit society to shaming the marketers of new-age, new-wage and "alternative" crapola by giving them the PLA treatment.
Any takers?
P.S. Please don't waste your time and precious bandwidth by excoriating me for being a closed-minded rationalist. I won't care.
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Aren't there better ways to help people?
"Mathieu made a lot of money last year," said Lerner, "and he wanted to start applying it to some type of social purpose. Mike is a very funny guy -- he has progressive values, but also a very dark, competitive streak. We thought it would be twisted to really use free market rhetoric against payday loans, as a way of demonstrating how as a society, converting short-term financial pain into long--term financial pains isn't good for our citizens."
So, making a satirical web site is serving a social purpose? That seems tenuous, at best. The payday loan industry won't care and the poor folks who rely on the predatory lenders won't see it. Seems like he could be using his Microsoft windfall on something more tangible.