A look at what's going on in Trinidad, on H Street, and in the larger area north of Capitol Hill.
Wednesday, August 15, 2007
WP: Payday Lenders Rally Against Bill
I mention this article because we have such a large number of these places on H Street and this legislation could have a major impact on the industry in DC.
15 comments:
Anonymous
said...
Interesting. Yes, they're hurting people with their exorbitant fees, but I would expect them to close up shop if they're limited to 99 cents. That seems too low. Won't people just end up spending more money on gas and go to VA or MD?
99 cents would probably put them out of business, and while the libertarian streak in me says that if people are willing to pay the fees, then it's on them, these payday loan centers are vultures. They exist to profit off desperate people. 99% of payday borrowers are forced to keep borrowing to afford the fees and advances. I'm pretty unsympathetic to their complaints.
These businesses prey on the poor and the unsophisticated. I have no problem with them being shut down. Far too often their clientele don't really grasp just how much they are paying these outfits.
It's a bit of hucksterism for these outfits to prey on the poor and then accuse those that want reform for protection of the poor of being classist.
Typical BS. They need to be shut down or regulated as suggested.
Ok, Hillman, say they're shut down. What do people who use these services do now? (I DON'T support their gouging, but it's a cop out just to say "shut them down"). I don't see a bank trying to come in and offer short-term, easy loans.
oh please, .99 on $100 won't keep one open. I don't want to be an apologist for these companies, but the rate does have to reflect the lower than expected payback rate. I don't think it should be $20, but .99 is probably just going to cover keeping this "one" place running (maybe); it won't cover the losses of defaults.
Even if you assume it's free to run the store, this would only cover a 1% default rate. That's sticking your head in the sand as to how to solve this issue.
but what if they hire the Good Guys dancers to staff the place, heck i might even go! the interest they charge will still be less than the tips i give!!
kidding. NY pretty much put these payday places totally out of business. the only real danger of doing that is that these poor folks turn to mafia like organizations or some sort of loan sharking.
NY did put them out of business, but keep in mind new york had to first force larger banks like Citibank and what is now Bank of America to give poor people checking accounts and some access to credit. Something these banks had refused to do for years. Payday loans may be bad but for a lot of low-wage earners these payday outfits are the only legal option if an emergency arises. If we're going insist on protecting the poor from themselves then we should also outlaw the DC lotto and liquor stores. People need choices, no matter how unattractive some of those choices may be. When the alternative is losing your house/lease or having the lights cut off, I'd rather have a bad option than no option at all.
Most poor people can't afford the fees banks charge either - which is why they use these places. If the Payday loan places are pushed out, something legal, affordable, and viable should be put in its place-not that I know what that is...
I read so much negative information on payday loans, but in crunch times they can really help out. I've used Ace Cash Express more than I care to mention, and I always pay my loan back on time. I've never had any problems. It's really helped me. To run them out of town will hurt many people.
15 comments:
Interesting. Yes, they're hurting people with their exorbitant fees, but I would expect them to close up shop if they're limited to 99 cents. That seems too low. Won't people just end up spending more money on gas and go to VA or MD?
99 cents would probably put them out of business, and while the libertarian streak in me says that if people are willing to pay the fees, then it's on them, these payday loan centers are vultures. They exist to profit off desperate people. 99% of payday borrowers are forced to keep borrowing to afford the fees and advances. I'm pretty unsympathetic to their complaints.
These businesses prey on the poor and the unsophisticated. I have no problem with them being shut down. Far too often their clientele don't really grasp just how much they are paying these outfits.
It's a bit of hucksterism for these outfits to prey on the poor and then accuse those that want reform for protection of the poor of being classist.
Typical BS. They need to be shut down or regulated as suggested.
Yes, but shutting them down in DC won't eliminate demand...
Ok, Hillman, say they're shut down. What do people who use these services do now? (I DON'T support their gouging, but it's a cop out just to say "shut them down"). I don't see a bank trying to come in and offer short-term, easy loans.
they'll all go out of business except for one. everyone will go to that one place, and it'll be able to survive because of economy of scale.
oh please, .99 on $100 won't keep one open. I don't want to be an apologist for these companies, but the rate does have to reflect the lower than expected payback rate. I don't think it should be $20, but .99 is probably just going to cover keeping this "one" place running (maybe); it won't cover the losses of defaults.
Even if you assume it's free to run the store, this would only cover a 1% default rate. That's sticking your head in the sand as to how to solve this issue.
but what if they hire the Good Guys dancers to staff the place, heck i might even go! the interest they charge will still be less than the tips i give!!
kidding. NY pretty much put these payday places totally out of business. the only real danger of doing that is that these poor folks turn to mafia like organizations or some sort of loan sharking.
exactly.... the loan sharks won't give reasonable rates either
NY did put them out of business, but keep in mind new york had to first force larger banks like Citibank and what is now Bank of America to give poor people checking accounts and some access to credit. Something these banks had refused to do for years. Payday loans may be bad but for a lot of low-wage earners these payday outfits are the only legal option if an emergency arises. If we're going insist on protecting the poor from themselves then we should also outlaw the DC lotto and liquor stores. People need choices, no matter how unattractive some of those choices may be. When the alternative is losing your house/lease or having the lights cut off, I'd rather have a bad option than no option at all.
Anonymous:
My post suggested shutting them down or regulating them. Either one.
Most poor people can't afford the fees banks charge either - which is why they use these places. If the Payday loan places are pushed out, something legal, affordable, and viable should be put in its place-not that I know what that is...
maybe the minimum wage should be increased a tiny bit more...
I guess all the poor people will have to move to Maryland so they can have acess tot hese places.
a possible silver lining.........
Sorry half kiddding.
I read so much negative information on payday loans, but in crunch times they can really help out. I've used Ace Cash Express more than I care to mention, and I always pay my loan back on time. I've never had any problems. It's really helped me. To run them out of town will hurt many people.
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