Nothing, but lawmakers who are impotent to deal with the housing crisis feel the need to beat up on lenders, any lenders. Today’s Wall Street Journal sums up the political climate:
“State legislators are really frustrated that they can’t do anything about the subprime-mortgage stuff,” said Steven Schlein, a spokesman for the Community Financial Services Association of America, a trade group representing payday lenders. Mr. Schlein said legislators are going after payday lenders because “it gives them something to say that they’re doing something about lenders, even though it has nothing to do with the housing crisis.”
That’s exactly right.
1 response so far ↓
1 Nathan // Aug 10, 2008 at 6:40 am
Actually, it does. The banks are losing from the mortgage crises, so if they shut down lending institutions, revenue from overdraft fees will increase enough to help keep them afloat through it. Anyone figure out the “interest rate” on those? I’ve heard about 5 times that than payday lenders, but you do the math. That’s the best explanation I can come up with.
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