Weekly update of my legislative agenda issue.
There has been no action on any of the payday lending legislation I previously listed. According to The Daily Press, both sides of the debate were supposed to have had a meeting last Saturday to try to hash out some compromise. Of course, having the second largest payday lender pay $100,000 to settle charges of “widely violating state laws” doesn’t help their cause.
One of the points made by proponents of payday lending is that they are the lenders of last resort, the only source of these small, short-term loans. Not true. Credit unions, churches and nonprofits are stepping up to provide these loans. I only wish they had stepped into the breech before the payday lending law was passed.
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VIVIAN J. PAIGE | All Politics is Local 
Is there a website where we can email our General Assembly members about this issue?
I haven’t seen a website this year.
Name one credit union, church, or non-profit that will provide someone with bad credit with a short-term loan for an emergency.
Credit unions require you to be a member and take days or weeks to provide a loan, if they will give it to the credit-risky folks who rely on payday lenders.
How many churches and non-profits are prepared to loan more than a billion dollars a year to people with immediate needs who are credit risks.
A compromise is the right way to go. Kill the payday lenders and you leave a lot of people with no choice at all for emergency cash.
“Fair”player-
One of these churches, happens to be the Catholic church. Both my former parish and my current ones do this. If the parish is unable, they will refer people to Catholic Charities.
Payday lending is exploitation. Period.
I hope Glen Oder’s bill moves forward and caps the rate. Or Mclellan’s bill passes.
I’m Episcopalean, and like most churchs, my parish runs a host of services for the poor in our community. As well they should; I’m pretty sure none of us are tithing in the hopes that they’ll spend the money on a slightly classier bottle of sacramental wine.
I thought Episcopalians used sacramental single-malt scotch.
Right now, payday loans are a cheaper alternative to bounced checks, and restart fees on utility bills. If a business can provide cash advances to high risk consumers at lower rates then payday lenders, bounced check fees, and utility restart fees, then those new businesses should try to compete in the market. Price fixing and usury limits do not have the intended effect of forcing legal lenders to lower their fees. Instead, legislating price caps simply forces legal lenders to stop offering loans to certain consumers.
In other words, if legislators cap the fees on short term loans or bounced check fees, then lenders and banks simply stop offering credit to a large segment of the market. This is not a solution, as persons living paycheck to paycheck will resort to “unregulated” lenders. Prohibition failed in other arenas, driving people to unscrupulous providers, and the same occurs when legislators outlaw payday loans. Typically, when states eliminate payday lending, the consumers turn to unregulated foreign based Internet payday lenders.
See the following article from the Federal Reserve Board regarding How Households Fare after Payday Credit Bans, for more information: http://www.newyorkfed.org/research/staff_reports/s … . It would be far better to regulate and monitor short term loans, and to find ways to encourage competition, then to simply legislate these consumers into the hands of unregulated lenders.
Close, Mouse. We use port, so it’s fortified wine–but with brandy in our case, not with scotch. That we save for the meet and greet in the parish hall.
It…uh…it kills the germs you get from using a communal chalice. Yeah. That’s why….
All of you who want to essentially ban payday loans really should read the study mentioned by JBHO. The link he provides is broken, however. Here’s the url:
Click to access sr309.pdf
Credit unions charge a membership fee, which most new payday consumers can’t afford, at the time they need the loan. If the credit union option appeals to consumers and they can afford the up front credit union fee, then such competition is wonderful in the marketplace. If a person happens to already be a credit union member, the alternative works. But, for most consumers, when an unexpected financial need arises, paying a $40 membership fee is unrealistic. Churches, nonprofits, and family members are also an alternative for many people who have an unexpected financial need. But for persons who have a need, but do not want to ask for help at church or with family, the market should allow for a viable alternative. Even if the cost is expensive, to offset the risk, why should the government step in and cut off this regulated alternative, turning people to unregulated lenders, based in off-shore locations?