Payday lenders to fess up - Democratic Underground

flashl

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Sat Nov-17-07 07:21 AM
Original message

Payday lenders to fess up

Lenders use posters to tell customers payday loans’ annual cost

After years of saying the math does not apply, the payday industry now will tell borrowers in large type: If you borrow $300 for two weeks with a $45 fee, you are paying the equivalent of a 391 percent annual interest rate.

Spartanburg-based Advance America and other members of the Community Financial Services Association will require its members to declare both fees and annual percentage rates.

Starting Jan. 1, the notices must be on posters that are at least 18-by-22 inches with letters that are at least a half-inch tall. Displays also will be required on the companies’ Web sites.

Payday lenders operate in 38 states, but they are battling consumer groups who say they trap poor people in a cycle of debt. The companies are opposing tighter restrictions proposed in South Carolina and several other states, and are finding some of their practices have been targets of lawsuits.

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Yeah, larger letters should diminish a desperate consumer need to borrow.

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Skidmore

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Sat Nov-17-07 07:35 AM
Response to Original message

1. This will be the next house of cards to fall.

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flashl

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Sat Nov-17-07 07:59 AM
Response to Reply #1

2. Some states have made an effort to shut 'payday' lenders down

Even the Pentagon is targeting the 'lenders' near military installtions. The only success in some states was shutting the car title loans.

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Angela Shelley

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Sat Nov-17-07 09:38 AM
Response to Original message

3. When do we make "ignorance" illegal?

It´s not the Payday lenders who trap people, it´s the "American Way of Life" which tells individuals from the day they were born that they can have "EVERYTHING NOW".

Basic Financial Education is more important than Payday Lender Restrictions.

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flashl

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Sat Nov-17-07 09:50 AM
Response to Reply #3

4. Its not about consumer ignorance its about desperation

and "legal" robber barons.

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fed-up

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Sat Nov-17-07 10:01 AM
Response to Reply #3

5. I think you are on wrong board-Are you okay w/391% interest to those that can least afford it?

Edited on Sat Nov-17-07 10:02 AM by fed-up

Most people use payday loans to cover what their meager paychecks will not.

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Le Taz Hot

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Sat Nov-17-07 10:09 AM
Response to Reply #3

7. I used to work with seniors

who, due to extremely limited income (less that $500.00 a month), got roped into using one of these vile institutions as they would RUN OUT OF FOOD before they got their SS check. The interest would compound throughout the year so by the time they got their income tax check, guess where the whole check would go?

I can see you, my friend, have never been desperate. Let's hope you never experience and if you do, you'll develop something akin to compassion.

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TahitiNut

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Sat Nov-17-07 11:23 AM
Response to Reply #3

10. When do we make PROFITING from another's ignorance illegal?

When do we stop smirking and calling it "shrewd" or "smart" to exploit ignorance? When do we own up to the principle that "good business" is a win-win ... where real value to both the seller and buyer is the hallmark of fair trade? As long as people can profit from the ignorance of others, the profiteers will attempt to perpetuate that ignorance. It's socially SICK and DEBASED to systematize narrow advantage to conditions which ultimately HARM that society.

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supernova

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Sat Nov-17-07 10:03 AM
Response to Original message

6. NC threw those rat bastards out of the state completely

I think in 2005. Not sure of the actual date tho'.

And no one was clamoring for them back again.

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Le Taz Hot

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Sat Nov-17-07 10:11 AM
Response to Reply #6

8. I wish they'd throw them out of CA.

I live in the Central Valley which has a high poverty rate and there are 4 of these suckers on every corner.

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terrya

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Sat Nov-17-07 11:07 AM
Response to Original message

9. I think Congress needs to pass legislation to ban those fuckers.

Seriously, payday lenders are one step below Mafia loansharks. I've, unfortunately, have taken out payday loans in the past. And yes, the interest rates are obscenely exhorbiant. And yes, you ARE in a cycle of debt when you get involved with them.

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