Posted on27 October 2009.
Huffington Post has a good video while this particular comment caught our eye:
“In looking at indecipherable credit card statements and documents, mortgages you can’t understand and APRs from payday loans and high overdraft fees, I don’t see how anyone can say we’ve done a good job protecting consumers from financial services.”
This is the epitome of nanny-statism. Ms. Bair, consumers need access to credit and can make their own decisions about financial services.
Jon Schultz: Cordray should know better than to describe payday...
Nick Sparagis: I agree. People are people. We all make good and...
Ty: It depends a lot on the state too. Some states ha...
Jon Schultz: Not only can overdraft protection be more expensiv...
cv: I believe that what Jean Chatsky actually said was...
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The significance of the APR is proportional to the term of a loan. For a 30-year home loan at 6% APR, adding one percent to the APR increases the total cost by over 20%, whereas with a two-week payday loan at 400% APR, adding one percent to the APR increases the total cost by less than a quarter of a percent.
APR caps are unscientific, eliminate short-term loans from the marketplace, and hurt consumers who only qualify for short-term loans by cutting off their access to credit, even in emergencies, or driving them to the dangerous black market.