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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
Sounds really good when you put it like that but its like using a shotgun to blow off a leg that has an infection. Because 500 turns into 575 then turns into 1000 then turns into 2000 and so on.

So then don't borrow someone else's money.
 
They are regulated.

Some State they are barred from operation. States have some regulation. They are in the lending business, other financial institutions are subjected to stricter regulation than pay day loan companies will ever be.
 
Some State they are barred from operation. States have some regulation. They are in the lending business, other financial institutions are subjected to stricter regulation than pay day loan companies will ever be.

They are regulated by the states if the states allow payday lending in the states. They are regulated by the agency designated by the state in which they are lending. In most cases, that agency is the state's banking department. They are quite regulated.
 
I think that these businesses are nothing more than a reflection of our society. Due to interest rates on loans that are FAR too low, we have created a society where people have stopped saving to buy things and can only see borrowing as the way to get something they can't immediately afford. It's time that we learned the lessons of the last few decades and stopped the borrowing. We need to raise consumer interest rates to about double what they currently are (and lowering corporate interest rates to encourage development) and start getting people to save/invest again and stop borrowing money.
 
They are regulated by the states if the states allow payday lending in the states. They are regulated by the agency designated by the state in which they are lending. In most cases, that agency is the state's banking department. They are quite regulated.

And that is the problem. Not well regulated at all.
 
And that is the problem. Not well regulated at all.

Once again, they are quite well regulated today.

What regulation do you propose be imposed on them? And be specific - and say what the expected outcome will be.
 
Once again, they are quite well regulated today.

What regulation do you propose be imposed on them? And be specific - and say what the expected outcome will be.

Do you know what rate of return they achieve on these loans.
No one states they are not to make a profit.
 
Do you know what rate of return they achieve on these loans.
No one states they are not to make a profit.

Who said anything about profit.

What specific regulations do you propose be imposed on them, and what do you expect the outcome of these regulations to be?
 
Who said anything about profit.

What specific regulations do you propose be imposed on them, and what do you expect the outcome of these regulations to be?

Longer terms with out the constant rollover and new fees added every 2 weeks.
 
Longer terms with out the constant rollover and new fees added every 2 weeks.

Longer terms? Define "longer terms". They're called "payday loans" for a reason, you know.

They don't automatically rollover, by the way. The person who borrows the money has to accept the rollover. These are not lines of credit and they are not evergreen loans.

New fees added every 2 weeks? What does that mean?
 
Longer terms? Define "longer terms". They're called "payday loans" for a reason, you know.

They don't automatically rollover, by the way. The person who borrows the money has to accept the rollover. These are not lines of credit and they are not evergreen loans.

New fees added every 2 weeks? What does that mean?

When the loan is renewed, it begins with fees added, does it not, so it is a new 2 week loan does come with a loan fee does it not?
 
When the loan is renewed, it begins with fees added, does it not, so it is a new 2 week loan does come with a loan fee does it not?

The "fees" are based on how much the borrower asks to borrow. If the borrower borrows $500, and the fee is $75, and he can't/won't pay it back at the end of the term that he agreed to, and he borrows $575 (which is what he owes), he'll have new fees. Because there is a cost to borrowing someone else's money. And in order to borrow someone else's money, you have to pay a fee. That's up to the borrower to decide how badly he wants to borrow someone else's money.

So you're suggesting regulating people?
 
The "fees" are based on how much the borrower asks to borrow. If the borrower borrows $500, and the fee is $75, and he can't/won't pay it back at the end of the term that he agreed to, and he borrows $575 (which is what he owes), he'll have new fees. Because there is a cost to borrowing someone else's money. And in order to borrow someone else's money, you have to pay a fee. That's up to the borrower to decide how badly he wants to borrow someone else's money.

So you're suggesting regulating people?


Most initiatives of this sort are a a law preventing stupidity. Of course if you fail to nee the terms and conditions there is a penalty, even the IRS charges that...especially the IRS.

These guys have to charge more because more people skip out.
 
The "fees" are based on how much the borrower asks to borrow. If the borrower borrows $500, and the fee is $75, and he can't/won't pay it back at the end of the term that he agreed to, and he borrows $575 (which is what he owes), he'll have new fees. Because there is a cost to borrowing someone else's money. And in order to borrow someone else's money, you have to pay a fee. That's up to the borrower to decide how badly he wants to borrow someone else's money.

So you're suggesting regulating people?
No, just the business model that in many cases is self perpetuating.On this we clearly disagree.
 
It is broke, next to no regulation, these people have no where else to turn.
Why should they not be regulated, other lending institutions are?

Says who? Certainly not the people who are actually involved in the transactions. You admit these people have nowhere else to turn, so when you shut down the industry because it's suddenly no longer profitable, what do you expect these people to do?
 
No, just the business model that in many cases is self perpetuating.On this we clearly disagree.

So the business model enables stupid, irresponsible people to be even more stupid and irresponsible, and because of that, it should be regulated.

In other words, you want to regulate the behavior of people.
 
So then don't borrow someone else's money.

I don't. But for people who don't understand the vast amount of hidden predatory charges then I would also stop them preying on the people who are less fortunate or desperate. Same way I can protect myself from being raped (and I am a man) but I'm also happy to have police to stop others who can't protect themselves.
 
I don't. But for people who don't understand the vast amount of hidden predatory charges then I would also stop them preying on the people who are less fortunate or desperate. Same way I can protect myself from being raped (and I am a man) but I'm also happy to have police to stop others who can't protect themselves.

There's nothing hidden about the charges you pay when you take a payday loan. They have to comply with the Truth In Lending laws and have to disclose to you what you will pay. You have to sign it. Nothing hidden, and nothing predatory.

And it's nice of you to assume that all other adults are too stupid to protect themselves so you have to do it for them, but this isn't a nanny state.
 
Says who? Certainly not the people who are actually involved in the transactions. You admit these people have nowhere else to turn, so when you shut down the industry because it's suddenly no longer profitable, what do you expect these people to do?
Who is shutting the industry down? Come on now.
Why do these people have no where to go for small loans except these predators?
And that is what these companies are. That is their business model.
And how someone can say they earned this type of treatment is beyond my ability to understand.
 
So the business model enables stupid, irresponsible people to be even more stupid and irresponsible, and because of that, it should be regulated.

In other words, you want to regulate the behavior of people.
Generalizing all who use these predators?
 
Generalizing all who use these predators?

You generalize constantly. I have no idea why anyone pays the slightest attention to you.
 
There's nothing hidden about the charges you pay when you take a payday loan. They have to comply with the Truth In Lending laws and have to disclose to you what you will pay. You have to sign it. Nothing hidden, and nothing predatory.

And it's nice of you to assume that all other adults are too stupid to protect themselves so you have to do it for them, but this isn't a nanny state.

In my country there is. Like most terms and conditions trained solicitors can't make head nor tale of them. As I have said in my country, which I took pains to make the distinction that I was comparing the UKs pay day lenders which you clearly missed there is no truth in lending laws, whatever the hell that is. There is life outside of the USA bub.

Its nice of you to assume that by having a police force the population is to stupid to protect themselves, by having any regulation ever and having government at all means you basically think that the population is stupid and idiotic. Fantastic logic...no wait there is no logic there at all.
 
You generalize constantly. I have no idea why anyone pays the slightest attention to you.

No I do not - I see you are upset.
Not good for the health.
 
Because you're the one proposing that we change the system, you just have no idea how to actually change it.

Morning Cephus....Really? I don't recall seeing my name in the OP...All I am doing is debating on a message board about a business that I feel is highly unethical. I don't see where that means that I personally have to have the entire solution worked out...

But, I will say I do agree with some of the points that you and Tres lay out, they are valid...Such as no one forcing these people to take out the loans...That is a good point and I am hesitant to get into the business of 'saving people from themselves', however, I just don't like these places...

The system works, the people involved in these transactions aren't being harmed...

Consider this from Pew....

"People who use payday loans are struggling financially, and they usually have trouble covering ordinary livingexpenses from month to month. Most are paying bank overdraft fees, most carry credit card or other debt, andalmost all have credit scores that are at the lowest end of the scale.

Policy discussion in recent years has focusedon whether payday loan customers need more access to credit, and what rate of interest is appropriate for such loans. These are valid questions, but there is insufficient evidence to know whether consumers are better off with or without access to high-interest loans (even if the loans have affordable payments).

There is, however, sufficient evidence to conclude that conventional lump-sum payday loans harm consumers compared with loans that have affordable payments. It is clear that the lump-sum payday loan has inherent structural flaws that make it unaffordable and dangerous for consumers, and that new policies to eliminate this failed product are warranted."

http://www.pewtrusts.org/~/media/le...13/PewPaydayOverviewandRecommendationspdf.pdf

they are doing it willingly, understanding the consequences.

that's debatable...Many, in fact I would say most don't fully understand how to budget, and spend day to day, therefore, understanding the long term effect on their bills is not too much of a thought at the time of taking out these products.

It's only the people on the outside who are trying to save these people from themselves.

that is true, and I am conflicted about my own position on this, but in the end I stand on ethical practices, and this industry is void of ethics. I know first hand.

The system ain't broke. Stop trying to fix it unless you have a better solution.

All I can say is that if I were ever in that position (again) I would hope that someone would help me ward against people, con men really, out to drop the anvil on my head...

Are you in the business Cephus? I just wonder. Because, although my arguments in here are often on the political right because I am a believer in personal responsibility, but, and this is about the only but, when I see clear advantage being cast on one group of people with little resource to correct the problem, I think it is a horribly unethical thing to do....But, I do want to say that I don't have good answers on how to fix it, I just know that it is destructive.
 
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