• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Consumer Protection Agency Seeks Limits on Payday Lenders

Pay day loans

  • Regulate - Yes

    Votes: 36 81.8%
  • Regulate - No

    Votes: 7 15.9%
  • No opinion

    Votes: 1 2.3%

  • Total voters
    44
The banks' lending policies are getting scrutinized by, regulated by, and clamped down on by the CFPB.

I don't need your anecdote about bank managers being your friends. I've been posting about the CFPB and banking for 2 years. I know it intimately, and not through friends who work as managers in branches. I'm speaking from real world and very deep understanding.

The banks aren't the monsters here, nor is it their fault that people turn to payday lenders. And regulating payday lenders out of business is only going to hurt the people who rely on them for cause and as the last resort.

Poor people use payday lenders because they are there. Before there were all these payday lenders they went to pawn shops. At least with a pawn shop they did not end up in the kind of vicious cycle they end up in with payday lenders. Worst case scenario with a pawn shop was the pawn shop kept their item. On balance I think payday lenders do more harm than good.
 
I just finished reading the article. That's an old article and even credit unions won't make unsecured loans anymore to people with bad credit. Credit counseling won't help anyone get short term money. Cash advances on credit cards (which were suggested as an alternative) are an equally poor decision.

People who need payday loans are, as you say, in very deep financial trouble to begin with. I'm confused how payday lenders are called names like "vultures" and other things. It isn't their fault that they offer a service to people who are spending beyond their means and got themselves in trouble.
What is the rate of return for these companies. If they were losing money, they would not be in it.
 
No, America needs smarter, more responsible people who don't get into credit trouble in the first place. The guy with the 525 credit score *EARNED* that score, they aren't just handed out arbitrarily. They made their bed. Why are you so opposed to them lying in it? You have to prove yourself worthy of getting a loan by showing a history of paying back money borrowed. These people are not worthy of any kind of loan, that's what their credit score means. Therefore anyone crazy enough to give them a loan at all is going to charge a lot more because there is a lot more risk involved. Many of these people, as the article shows, are incapable or unwilling to pay those loans back.
Bet they are financed by banks?
 
At one time local managers, knowing the person could make or break a loan. Now it goes thru a process, computer program that makes it a clear cut decision. Managers that overrule a decision, these decisions are collected and are part and parcel of their bonuses. Overriding a comp prog decision, taking it to a higher level, waste of time.
If you wish to research this, fell free to. I have no intention of doing this.

If you don't work in or around the banking and regulatory industry, which you don't, you shouldn't post about something you don't know (having friends who are bank managers isn't experience).

Most banks in this country and most credit unions in this country do not use automated underwriting tools for consumer non-real estate loans, and there are no automated underwriting tools for personal unsecured credit lines. These loans are made the same way they have always been made, which involves risk rating the loan and using such factors as the applicant credit history to make the decision, but not limiting the decision to credit history.

Bankers don't get bonuses on small consumer loans.

The reason why banks and credit unions don't lend to credit risks anymore is because of the regulations on risk management and the requirements each one has to meet in order to stay in their business, and because all of their loans get scrutinized by their primary regulator in their Safety & Soundness exams. It has nothing to do with "process, computer programs that makes it a clear cut decision".

Banks and credit unions won't lend to people who put them at risk. Those people need to either clean up their credit & financial positions, borrow money from relatives or friends, take payday loans, or be out of luck.
 
Poor people use payday lenders because they are there. Before there were all these payday lenders they went to pawn shops. At least with a pawn shop they did not end up in the kind of vicious cycle they end up in with payday lenders. Worst case scenario with a pawn shop was the pawn shop kept their item. On balance I think payday lenders do more harm than good.

They definitely do more harm than good to the people who borrow the money without being able to pay it back. I would never consider a payday lender, but if doG forbid I had to, I would know what the cost is I owe to the lender after the 2 weeks or 2 pay periods is up, and make damn sure I can pay it back before I sign anything.
 
What is the rate of return for these companies. If they were losing money, they would not be in it.

Who said they were losing money? If you make a profit for providing a service, you aren't a vulture.
 
They definitely do more harm than good to the people who borrow the money without being able to pay it back. I would never consider a payday lender, but if doG forbid I had to, I would know what the cost is I owe to the lender after the 2 weeks or 2 pay periods is up, and make damn sure I can pay it back before I sign anything.

Well I will just tell you this, and its not a PC thing to say, but as someone that grew up very poor and thus was around a lot of very poor people, the majority of poor people are easy pickings for payday lenders. They live paycheck to paycheck and in my opinion one of the main reasons they need to be better regulated is not just to protect the working poor from payday lenders but also to protect the working poor from themselves. No one is getting helped out by getting a loan that to pay back imposes a greater hardship than just doing without the money does.
 
There are some points that I disagree with by some member.
Please do not take offense.
2 days bad weather on vacation with my lively bride.

Still a grand day, great supper and I rolled me a big fat one and yep, not the best, rather harsh but a cold beer in my hand.
 
They definitely do more harm than good to the people who borrow the money without being able to pay it back. I would never consider a payday lender, but if doG forbid I had to, I would know what the cost is I owe to the lender after the 2 weeks or 2 pay periods is up, and make damn sure I can pay it back before I sign anything.

the tragedy I have witnessed here is that when you hire someone who is restarting life, recovering from addictions , a first job clean and sober you watch the poor son of a bitch sliding backwards through no fault of his own. He makes $400 one week and after allocating essentials he has $80 bucks to get him to next week and wham, an emergency. He borrows $200 on next week's pay, and wham, it rains too hard to work much. He can lose hope and start using again....and he did not create that.

I do not have an answer but when I ran a non profit for rehabilitating through work we were the ones who lent against pay checks ..and no interest, but that is not a sustainable solution
 
Well I will just tell you this, and its not a PC thing to say, but as someone that grew up very poor and thus was around a lot of very poor people, the majority of poor people are easy pickings for payday lenders. They live paycheck to paycheck and in my opinion one of the main reasons they need to be better regulated is not just to protect the working poor from payday lenders but also to protect the working poor from themselves. No one is getting helped out by getting a loan that to pay back imposes a greater hardship than just doing without the money does.

Then you, having grown up poor, probably understand as much as anyone the need to be able to borrow money when you need it for an emergency. And that's what payday loans were intended for - emergency cash. For some reason they've become something else. And if they're driven out of business, then the people who do need them on occasion won't have access to them. Why should those people be penalized because other people need to be protected from themselves?

And what's the alternative for the poor people?
 
Last edited:
the tragedy I have witnessed here is that when you hire someone who is restarting life, recovering from addictions , a first job clean and sober you watch the poor son of a bitch sliding backwards through no fault of his own. He makes $400 one week and after allocating essentials he has $80 bucks to get him to next week and wham, an emergency. He borrows $200 on next week's pay, and wham, it rains too hard to work much. He can lose hope and start using again....and he did not create that.

I do not have an answer but when I ran a non profit for rehabilitating through work we were the ones who lent against pay checks ..and no interest, but that is not a sustainable solution

Hey, there are always legitimate hard luck stories. I get that. But most hard luck stories aren't because of situations like you outlined, and most people who take these loans don't understand what they have to pay back (even though by law it has to be disclosed on the agreements they sign) which is why they enter the cycle of rolling the loans.

The only alternative is similar to what you mentioned, but that requires private capital. Or a nationalized lending system set up by the CFPB.
 
My opinion -Pay day loans prey upon the poor- but where else can they turn - banks- forget it.
http://dealbook.nytimes.com/2015/02...agency-seeks-limits-on-payday-lenders/?ref=us

In the world of consumer finance, they are chameleons: payday lenders that alter their practices and shift their products ever so slightly to work around state laws aimed at stamping out short-term loans that can come with interest rates exceeding 300 percent.

Such maneuvers by the roughly $46 billion payday loan industry, state regulators say, have frustrated their efforts to protect consumers.

They should be outlawed. Yes they prey upon the poor, and unfortunately many people who use them do so because they have bummed off their friends and relatives without repaying the debt to the point that they have nobody else to turn to. I don't carry cash and my bank doesn't have ATM's. If somebody needs gas or diapers, then they only get what I buy them in person. I have learned that they are less likely to come to me when I am not handing out cash but will buy whatever it is they allegedly need.
 
So "let's not call it 'interest,' let's call it a 'rollover,' dudes!" Right.

Fools nobody except you.

It isn't interest. It is a failure of the borrower to follow through on their agreement. Some people just aren't bright enough to recognize that.
 
Bet they are financed by banks?

Bet who is? Certainly not the people going to payday advance places. People deserve to reap the rewards of their actions.
 
Hey, there are always legitimate hard luck stories. I get that. But most hard luck stories aren't because of situations like you outlined, and most people who take these loans don't understand what they have to pay back (even though by law it has to be disclosed on the agreements they sign) which is why they enter the cycle of rolling the loans.

The only alternative is similar to what you mentioned, but that requires private capital. Or a nationalized lending system set up by the CFPB.

I do not disagree that the majority of this business is capitalizing on the stupid, one of the categories I first outlined. Deciding to get a $50 advance for a couple of grams of pot four times between pay checks of $300 is where they make the serious coin. And, as usual, others unintentionally get swept up in the carnage.

Go to Vegas, attend an AA meeting, you will know more about Nevada bankruptcy law than you care to. And for every one of them there are an estimated 5 who go down with them, usually holding the tab
 
For people with bad credit, no collateral, needing money in an emergency, they serve a purpose.

No they really don't. Poor people with basic financial literacy would not need to use such a service
 
My opinion -Pay day loans prey upon the poor- but where else can they turn - banks- forget it.
http://dealbook.nytimes.com/2015/02...agency-seeks-limits-on-payday-lenders/?ref=us

In the world of consumer finance, they are chameleons: payday lenders that alter their practices and shift their products ever so slightly to work around state laws aimed at stamping out short-term loans that can come with interest rates exceeding 300 percent.

Such maneuvers by the roughly $46 billion payday loan industry, state regulators say, have frustrated their efforts to protect consumers.
I agree. They are a scourge. And should be reigned in.
 
For people with bad credit, no collateral, needing money in an emergency, they serve a purpose.
At what price? I'm not saying that they aren't a resource for those in dire situations, but they are straight up loan sharks.
 
They should be outlawed. Yes they prey upon the poor, and unfortunately many people who use them do so because they have bummed off their friends and relatives without repaying the debt to the point that they have nobody else to turn to. I don't carry cash and my bank doesn't have ATM's. If somebody needs gas or diapers, then they only get what I buy them in person. I have learned that they are less likely to come to me when I am not handing out cash but will buy whatever it is they allegedly need.

I've noticed that too. About a month ago I was coming back from the movie theater in Olympia to my home near Shelton Washington and so I get off the highway and there's an exit with a Walmart and a gas station stuff and I need is a few groceries so I pull into the Walmart Guy in front of Walmart roaches me and tells the story about how his car is out of gas and he lives in Yakima ( which is 130 miles away) so I think about it a second and say okay if you pull your car up to the gas station I'll buy you 10 gallons of gas that should get you to Yakima if enough left over to go around town a bit. Suddenly his car wasn't there at the Walmart it was 5 miles up the road, so I offer take him up to his car with a gas can and then he gets really mad at me and walks away
 
At what price? I'm not saying that they aren't a resource for those in dire situations, but they are straight up loan sharks.

They are not a resource it all. A friend of mine took out a couple loans from one of those places, and I asked him why he took them and he said he didn't have enough money for his bills at the end of the month, so I sat down with him and his paystub's and bills and we work out as budget and it turned out the problem was not that he didn't have enough money the problem was that he simply didn't spend it according to a budget. He has cents paid off the payday loans and hasn't darken their doorstep sense
 
The government's going to make things better for us? Again?
 
Back
Top Bottom