Contrary to what you wrote, most people do NOT pay the loans back, by a long shot!

We even had people hit 3 or 4 places to pay the attorney to file bankruptcy!

Nothing that looks this easy to make money is, as a rule. When you think about it you might agree.

I DO think that it is a great way to LAUNDER money for the mob/drug guys…

Fake bad loans to your straw names and poof! It’s in the system, free and clear!

Over 80% defaults! You make $60 off two and LOSE $1200 on the others!

Maybe in some bigger cities it’s better, but it can’t be by much.

Oh and you can’t collect on bad checks cause they’re post dated, making them a loan notes.

Try hiring a lawyer to sue for $200.00 and see how THAT works out.

Why do I have less of a problem with pawn shops? Because, even though the pawn is a “loan,” the pawner can walk away from it and forfeit the collateral, without necessarily needing to flip their loan.

On the other hand, payday lenders’ business model DEPENDS on people failing to pay the first loan and flipping it into an ongoing and escalating. It’s like crack in that regard.

Yes, desperate folks get ripped off…that won’t change. I am saying that SOME limits on what people can rip them off for are reasonable. So, far from pushing folks into worse alternatives, I am actually advocating taking what I see as one of the worst alternatives off the table in the first place. But, I have no doubt others disagree.

Man, I did NOT mean to type so much.

(P.S. I have not needed the kinds of “services” provided by a payday lender in some time, but I will admit that I have been check-to-check and had to push basic expenses forward in the not-too-distant past.)

I am in general opposed to government intervention, I value small government (and no-government) approaches to society’s ills. But I also know that there are highly unscrupulous people out there and there are limits to a “let the buyer beware” philosophy. For instance, it is illegal (not just wrong) to advertise that the bottled tap water I sell you will cure pneumonia. It’s fair that some would say that’s overly paternalistic, that the market can punish such liars. I just don’t agree that the hands-off approach is right in _every_ case.

So, if there are some cases where intervention is OK, what are they? I think that is the line that America needs to re-draw. Over the past decades, the area of intervention has expanded far too much…so let’s pull it in. Way in. I’m with you on that. The question I think everyone is facing is: How far is “way?”

Overall, my point isn’t about “poor folks” so much as it is about “desperate folks.”

I strongly believe in taking personal responsibility, and that perhaps the greatest problem facing society is that too few people take such responsibility. But, I also I stand by my claim that it’s simply wrong to prey on people who are desperate. . . whether they brought that desperation on themselves (like me, in the day) or not.

Thanks, everyone.

–Brad

Before I forget – the reason I am writing this letter to you is this -I need to loan $100 for a gift to my old lady. I am getting my paycheck two weeks from now. The government has closed the pay day loans here in Oregon, so there is no one for me to turn to. Can I swing by your office and get the money? I hope it won’t be a problem for you to help out a brother. It won’t take more than a few minutes. After all, I still need the dow, you know.
A’ight, what’s the address of your place? BTW, if it’s okay, I will bring a few dozen of my friends with me – they are also looking for a quick loan.

They most certainly are waiting in the wings. Have we already forgotten the prohibition era? We must allow people to make foolish choices. After all, we are talking about full-grown adults. Did somebody appoint one of us to be a benevolent dictator? No, we should essentially mind our own business—and hope the free market resolves many of these difficulties. It must also be added that at least one group has attempted a non-profit solution. Sadly, they have found it to be a waste of time. Too many of the loans go into default.