Comment of the Day
January 2, 2009 | Uncategorized | Comments (2)How much debt a person has does not determine whether a payday loan is a good idea for them. If the loan enables them to repair their car so they don’t lose their job or saves them from eviction, then it’s a good idea even if they owe a million bucks. And it’s also a good idea even if it just saves them a few dollars in alternative fees that they would otherwise have to pay. People know their individual circumstances and are in a better position to know if a loan is good for them than the lender or any government formula put together by activists and politicians who want to pride themselves on how they are protecting us from ourselves.
Every loan is a gamble on the part of both lender and borrower, and nobody can ever guarantee that any loan can ever be repaid. If both the lender and the borrower mutually agree that the transaction is likely to further their interests, then who are you or any government agency to tell them that they can’t engage in it? If the lenders are tricking people into expecting one thing but delivering another that of course is deception which should be stopped, but apart from that, BUTT OUT, MAN!
If lenders have a responsibility to investigate the finances of people who apply for loans to make sure they can afford them then so do all other merchants and service providers. Is that the kind of society you want to live in? When you are the one who has to get government permission to purchase a product or service then you may feel differently about making politicians our parents instead of our servants.
Comments»
If lenders have a responsibility to investigate the finances of people who apply for loans to make sure they can afford them then so do all other merchants and service providers. Is that the kind of society you want to live in?
Gee, I thought that we got into the current credit crisis precisely because mortgage lenders decided they didn’t have to make sure borrowers could afford the loans they were pushing. They started acting like payday lenders but were surprised when so many people started to default on their loans. Who could have known?
Believe it or not, the vast majority of Americans do want to live in a society in which the government requires lenders to investigate the finances of people who apply for loans. Lending money is not like selling bread. The bread manufacturers never brought on a deep and painful recession. The lenders, by contrast, just did.
I’m not sure that I understand the current “credit crisis” – or that many people do – but I think if the mortgage lenders made bad underwriting decisions then they should face the consequences of that, whatever they may be, and other people with sufficient funds can step into the mortgage business and lend more wisely. If there is a shortage of such people or they don’t think that would be wise under current market conditions, then so be it. There are rainy seasons and dry seasons, and times when more or less credit is available. You can’t stay alive or have pleasure all the time, and trying to maintain economic well-being by blaming the lenders and restricting their freedom of commerce is, I think, counterproductive. There have definitely been abuses in the mortgage lending industry – i.e. bait and switch tactics and loan structures too complex for many people to understand – but apart from instances of actual dishonesty I think the people who have lost their homes really have no one to blame other than themselves, for making a bad bet in taking out the loan, and the fact that life must always alternate between better and worse times.
It is moralists and professional critics such as activists, politicians and the media who are always looking for someone to blame – and to be the ones whom everyone should trust to place constraints on “those responsible” – who have fed the public the current line of bull you spout, in my opinion, about both the credit crisis and payday lending.
The majority is not always right and democracy is more than majority rule. It involves a guarantee of rights, and one of those rights is the freedom to engage in honest business.
There is no essential distinction between lending funds and other forms of commerce. I think the obesity crisis in America will last considerably longer and cause a lot more suffering than the credit crisis, but should your grocer be required to check your medical records before he will sell you ice cream?