Comment of the Day IV
April 29, 2009 | Uncategorized | Comments (1)I can appreciate the letter and agree with it, but the payday industry is under fire. Rep. Guitierrez is sticking his neck out. We should work with him.
If the feds put through a law that will ensure the survival of the product, it’s a good thing. Fighting a battle on all fronts in every state is not an easy task.
Btw, would passage of this law make payday lending legal in all 50 states?
Let’s clear this up. The Gutierrez bill creates a ceiling, not a floor. So, as the letter says, it lowers rates in 23 states, but it doesn’t allow the industry into the 16 states that currently have rate caps or other laws that make payday lending unprofitable.
Comments»
I actually think that Nick is on the right track. If Mr. Guitierrez is willing to create a bill that would allow th industry to exist and seems to be open to discussing the issues, we should seek to create a standardized rate for all states, not just a cap. I do not have numbers on the illegal internet lending, but I would feel pretty confident that states that do not allow PDL’s have a much higher rate of complaints to their respective DFI’s than states that allow the product. If HR1214 would allow lending in all states, that would offset losses in states that have a fee in excess of $15 per $100. At the same time, it would mostly maintain the current staff while adding new jobs by opening up new states. And we all know that new jobs equals more taxes for our pitiful deficit. A win-win for everyone!