Payday Pundit

One government official had this to say about the inevitable closing of payday lenders across New Hampshire:

“(The industry spokesmen) say ’What are people going to do that don’t have access to these anymore?’ But we lived a long time in this country without access to these payday loans.”

Indeed we did.  But that is, in no way, shape or form, a reason that justifies the elimination of these loans.  Nor is it any solace to those who want the financial freedom to take out a short-term loan.  This is more “fuzzy reasoning” from critics of payday loans.

The article in the Keene Sentinel also lays out the effects of the New Hampshire cap on a $100 loan:

The cap would translate to almost $3 on a 30-day $100 loan, and $1.38 on a two-week $100 loan — or about 10 cents a day, according to The Associated Press.

Assuming an average of $15 dollars in profit per $100 loaned currently, the new law will mean a 91% reduction in gross profits.  That’s the money available to the business owner before taking out costs for leasing space, insurance, employees, loan origination… the list goes on.

Imagine if McDonald’s were only allowed to charge $.08 for what is currently a $1.00 double cheeseburger.  How long do you think McDonald’s would be able to continue selling those or anything else?