Great editorial on the new 36% APR rate cap from New Hampshire’s Union Leader…
Starting today, hundreds of payday lenders’ employees face layoffs and thousands of their would-be customers will rack up late fees and bounced-check fees because legislators and the governor don’t approve of the type of loan they would have taken out to avoid those costs. By legislative and Lynch logic, it is better to pay a $30 bounced-check fee than $20 in interest on a $100 loan.
Payday loans often amount to a bad deal. But in some cases they make sense. Shutting down payday lenders was a disservice. The law ought to be repealed at the first opportunity.
Payday loans often amount to a bad deal. But in some cases they make sense.
True enough, but every time a statute is passed that tries to preserve the good payday loans while preventing the bad ones, the lenders recraft the product to evade the regulations. Then the bad loans proliferate all over again. Witness Illinois, Texas, Virginia….
Eventually the reformers decide to prohibit the thing because you can’t rehabilitate sharks.
Arthur Ham is spreading misinformation. In NO state have payday loans been “prohibited.” Rate caps have forced payday lenders to leave because loans become unprofitible as the editorial points out.