More false reasoning and bad information in Virginia
July 30, 2008 | Virginia | Comments (0)Opponents in Virginia still can’t get over the fact that they failed to eliminate the payday loan industry — killing jobs and destroying a viable financial option for some people. These opponents are searching for any reason for the defeat… any reason other than the simplest: the people of Virginia wanted to hang onto the option of using payday loans. And for once, a legislature listened.
But that’s not the right answer for the opponents. As demonstrated on the Daily Press website today, critics of the payday loan industry are now blaming the amount of money the payday loan industry was able to spend to educate legislators and the public. The problem is, the critics still don’t have their facts straight:
By the time the legislative dust settled, though, what started out as an effort to cap the interest lenders could charge at 36 percent turned into a bill that let them increase their charges — so the effective interest rate on a two-week loan is now a mind-boggling 592 percent.
No. If by “effective interest rate” the author means ridiculous and unfair application of APR, then she’d be correct. But the term-specific interest rate (for two weeks) would be closer to $15 per $100, which is 15%. To reach the APR a person would have to renew the same loan 26 times, which is illegal in most states. Payday Pundit is beginning to think the critics of payday loans are intentionally mistaking the facts. They wouldn’t do that, would they?
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