Pros & cons
August 3, 2009 | Georgia, federal legislation, industry | Comments (1)The Atlanta Journal Constitution weighs the pros and cons of federal legislation on payday lending. We liked the con piece by CFSA’s Tommy Moore:
The effort to kill the payday lending industry is being spearheaded by two top lawmakers in Washington, D.C.
Rep. Luis Gutierrez (D-Ill.) has introduced legislation in the House that would make many payday lending stores across the United States unprofitable by setting a national cap on all payday loans at $15 for every $100 borrowed.
In the Senate, a bill has been introduced by Sen. Richard Durbin (D-Ill.) that would essentially close every payday lending store in the United States.
The senator’s legislation enforces a 36 percent APR for all loans.
This means payday lenders can only charge $1.38 per $100 borrowed over a two-week loan. A fee so low it will put stores out of business.
Comments»
Online lenders – overseas or domestic – who do not adhere to state lending laws are not unscrupulous if they run an honest business. For the residents of some states, getting a loan from one of these companies is a good alternative to a long drive across the state line.
It is the activists and politicians who distort this issue to promote their own agenda who are unscrupulous. They hurt the very people they claim to be helping by reducing the choices available to them – and even when you point out the invalidity of their arguments they will not change their point of view.