How come every place a traditional payday lenders offers an alternative service, the media calls it a “loophole?“  Just asking.

The Center for Responsible Lending has a letter-to-the-editor today in Virginia’s Daily Press. Same old blather:

At a time when dollars are so dear — especially to average working people — every member of the Virginia legislature must take a stronger stand against predatory lending than was expressed last year. In these dire financial times, broadly calling for change is simply not enough. Virginia’s families are waiting for its leaders to bring needed changes to their daily lives. The question for the Virginia legislature is, “Who among our elected state officials will support this much-needed reform?”

Typical deception.  When the writer says “reform” she means “ban.”

Larry Meyers rips the Daily Press columnist we discussed below:

It isn’t that Tamara Dietrich complains about payday lenders. Lots of uneducated or ideological journalists attack the industry with unsupported accusations or misrepresentations. However, her article in the Daily Press shows a staggering level of delusion and, frankly, outright stupidity that she deserves to be hung out to dry.

I think Larry hides his feelings too much.  He needs to learn to vent a little.

That’s what psychiatrists call it when someone accuses someone else in terms that really applies to the accuser.  In this case, a Virginia Daily Press columnist asks if a payday lending company is “mentally ill.”  Read the entire screed and determine for yourself if this is “projection” or not.

In a newspaper?  Who’d believe it?   An Advance America executive said this in today’ Virginia Daily Press:

During our eight years as a licensed lender in Virginia, Advance America has demonstrated a strong record of compliance. We steadfastly believe that a regulated financial environment is in the best interests of our customers.

But I believe that further regulations to restrict short-term lending in Virginia — as your paper advocates — will simply reduce the supply of credit and make borrowing more expensive for consumers. Many consumers will be forced to confront rapidly increasing bank and credit union fees for overdraft protection. Still other consumers will likely turn to unregulated lenders, including those offering loans exclusively over the Internet.

Virginia’s Daily Press lists its legislative priorities: 

Outlaw predatory lending

If the General Assembly can’t do the right thing on payday and car-title lending — after several years and the backing of a broad coalition eager for reform — we should question whether legislators are up to their job.

The law needs to protect people who are in financial distress from lenders who prey on them. They lend small amounts at usurious, punishing interest rates — often well above 300 percent APR — and under crushing conditions, such as confiscating borrowers’ vehicles if they miss payments.

The right thing to do is obvious: Impose a 36 percent interest-rate cap on short-term loans, the same cap that federal authorities impose to protect members of the armed services.

Sure, it’s a terrific time to reduce credit and layoff workers.

The nanny-state types don’t recognize their own contradictions.   From the Daily (VA) Press:

That’s payday lending. The good news is that from February through April of this year, the number of these short-term, high-interest loans — just to get to payday — was down 87 percent from the 2008 average.

———

What’s not known is what people are doing instead. Are they leaning on relatives or friends? Or foregoing some expenditures? To what extent are they turning to the new small loans credit unions are offering? Or to a more dangerous alternative, car-title loans?

Or just missing an important bill payment.   But remember, it’s all “good news.”

“Prurient”?    Read this strange letter to the editor yourself.

That would describe most editorial writers.  From the Virginia Daily Press:

The decrease in number of stores is good news, said Jay Speer, executive director of the Virginia Poverty Law Center. But there’s also some bad news, which is that some of the lenders have shifted to car-title lending.

We get it.  Laying people office, empty storefronts, less taxes paid to state coffers is “good news.”

Center for Consumer Freedom’s Tim Miller takes on a payday lending critic in the Virginia Daily Press:

A New York Times Magazine article last year noted that payday loans are a valuable financial tool, offering easy-to-understand conditions, with “no surprises, no hidden fees,” unlike many banks (who are not demonized by elitist politicians, despite their hidden fees).

Shutting down the short-term payday loan industry only forces these borrowers to resort to less desirable alternatives to make ends meet.