Our turn
October 1, 2009 | Alabama, industry | Comments (0)Well, Borrow Smart Alabama’s turn, at least. The payday lending group has a guest piece in a local paper today:
{Payday lending critic} Stetson says clearly in his column that hard working Alabamians “do need access to credit.” No one questions the concept that a working mother should be able to borrow $200 to pay an unexpected doctor’s bill, or that the guy delivering your paper should have access to a $100 loan to replace a blown-out tire so that he can go back to work tomorrow. The question has become how do we as a society best provide short term credit.
Stetson points to Arkansas and Georgia as leaders on this issue. In recent years, both Georgia and Arkansas have put legislative or judicial restrictions on payday lenders that have completely put them out of business. So what has that meant for the people who used short term loans? No studies have been done yet in Arkansas, but the Federal Reserve took a thorough look at Georgia and reported that “The increase in bounced checks (where payday loans were banned) represents a potentially huge transfer from depositors to banks and credit unions. Banning payday loans did not save Georgian households $154 million per year, as the CRL [Center for Responsible Lending] projected, it cost them millions per year in returned check fees.”
In other words, the paper delivery guy wrote a check for the tire he had to have and paid between $28 and $40 in fees to his bank or credit union for covering that check. If he could have taken out a payday loan, it would have only cost him $17.50.
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