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jtuck004

(15,882 posts)

12. Payday loans aren’t the problem. The problem is poverty.

Thu Jun 2, 2016, 08:11 AM

Jun 2016

...
No person should be living so close to the financial brink that he or she has to borrow against future wages just to pay the bills.

This is not the kind of debt people take on to improve their earning potential, like a business or student loan. This is the kind of debt people take on because their tanks have hit empty, and there's nowhere else to turn.

And more people are finding themselves in that situation more often these days. Here are three things that have happened in conjunction in America over the past decade: Debt loads have increased. Real earnings have stagnated. And payday lending has exploded -- while storefronts have declined from a high of 22,000 in 2007 to about 18,000 today, online lending has tripled in volume, to almost equal the $5 billion that flows through brick and mortar establishments.

https://www.washingtonpost.com/news/wonk/wp/2014/03/26/payday-loans-arent-the-problem-the-problem-is-poverty/

Note the need - not so much for "emergencies", but to get enough food for the next couple weeks, to pay a gas bill or the mortgage. This was written in 2014, and conditions are worse today for more people, and these loans are thus more necessary for more.

We should get rid of the profit, but it would hurt millions of people to remove this safety valve. On the other hand, unregulated loan sharks love it, 'cause they know no one will legislate the need away.

The problem is not payday lending, it is poverty. The answer is not to visit deprivation and hardship on those who it will hurt the most, instead of standing up to those who won't invest in American workers, our neighbors.

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Highlight:

Payday Borrowing’s Debt Spiral to Be Curtailed [View all] TexasTowelie Jun 2016 OP

DNC Chair Joins GOP Attack On Elizabeth Warren’s Agency Omaha Steve Jun 2016 #1

Is DWS in exit strategy mode, helping out new friends? Babel_17 Jun 2016 #31

Good news. truthisfreedom Jun 2016 #2

Why hasn't Clinton demanded Debbie step down after DWS tried to gut this bill? Android3.14 Jun 2016 #3

Plus won! Enthusiast Jun 2016 #14

Hear, hear! ananda Jun 2016 #19

Can't agree with you enough Stryst Jun 2016 #29

Dirty little secret. Fuddnik Jun 2016 #4

Another set of dirty little secrets. TexasTowelie Jun 2016 #7

Thanks for sharing this. I had no idea it's the gift that just keeps on giving. /nt trudyco Jun 2016 #34

They need to shut the SOBs down in ALL states ReRe Jun 2016 #5

There is an excellent proposal for the post office Warren Stupidity Jun 2016 #8

You're kidding me. ReRe Jun 2016 #9

yes, I remember Mrs. Warren and was it Obama? mentioned post office banks..but I think Congress Sunlei Jun 2016 #15

I've seen neither endorsement for nor against postal banking by Clinton. LanternWaste Jun 2016 #37

K & R. Thanks for posting. Surya Gayatri Jun 2016 #6

To say that these rules... sendero Jun 2016 #10

I'll believe it when I see it indivisibleman Jun 2016 #11

That's because the people that use payday loans on a frequent basis TexasTowelie Jun 2016 #13

It works more like this: indivisibleman Jun 2016 #41

In that case TexasTowelie Jun 2016 #42

True indivisibleman Jun 2016 #45

Payday loans aren’t the problem. The problem is poverty. jtuck004 Jun 2016 #12

Preying on the poor is one thing that helps make people poor Kelvin Mace Jun 2016 #17

great graphic! thanks jtuck /nt trudyco Jun 2016 #35

lend interest rate should be capped at whatever rate people with savings accounts receive. Sunlei Jun 2016 #16

All interest rates should be capped at 18% Kelvin Mace Jun 2016 #18

good point. Even 18% is a fabulous profit, especially on 'front loaded' loans- loan sharks use. Sunlei Jun 2016 #20

If that were the case the businesses would not exist TexasTowelie Jun 2016 #22

Then a "loan shark" becomes a pawn shop again. Sunlei Jun 2016 #23

So, triple digit ruinous usury Kelvin Mace Jun 2016 #24

I never said that interest rates that high were fine because the rates are predatory TexasTowelie Jun 2016 #30

That isn't possible TexasTowelie Jun 2016 #21

at 9% a front loaded loan is a fabulous profit for a loan shark. Banks 'take' 2% off the top of Sunlei Jun 2016 #25

Perhaps you need to bank with someone else besides Chase bank then? TexasTowelie Jun 2016 #32

I don't want to carry cash either. You're lucky to be close to a bank and have a 'safe' ATM. Sunlei Jun 2016 #33

Why not use a credit union? There are still a lot of those. trudyco Jun 2016 #36

DWS is having a sad today. Baitball Blogger Jun 2016 #26

Just making more hoops for the employees to jump through to verify a borrowers financial situation brewens Jun 2016 #27

search "payday loan", they scam people online- 4,710,000 results, people don't have to walk in. Sunlei Jun 2016 #28

I agree with some here trudyco Jun 2016 #38

Why not create competition and run them out of business? MichMan Jun 2016 #39

I'd like to see some flat-rate Islamic-style banking but you know the person who... Shandris Jun 2016 #40

How about telephone solicitation? bonemachine Jun 2016 #43

I've been receiving those phone calls also, TexasTowelie Jun 2016 #44