• 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
Ok, then there should be no problem in leaving the lenders alone, but rather restricting the times that the borrowers can use the service.

just the opposite
the lenders MUST be regulated/monitored so that they do not exploit the most easily exploited community in our society
but why would we want to limit the numbers of times that the financially needy can use these high rate services
 
not one payday lender i am aware of has gone out and forced their money upon these high risk borrowers who have no other alternative source of borrowed funds
those debtors have obligated themselves knowing they are going to have to repay an extraordinary amount of interest
but despite knowing this they borrow. many of them repeatedly

so, if you were to put your personal funds at risk within this clientele, what rate of interest would you command to make such loans?

As you said... "borrowers who have no other alternative source of borrowed funds"

Like I already told you, I don't have a number. But I know 400% is stupid.
 
just the opposite
the lenders MUST be regulated/monitored so that they do not exploit the most easily exploited community in our society
but why would we want to limit the numbers of times that the financially needy can use these high rate services

Because it is the cumulative rate that is the concern...On its own, one payday loan with a paid account only amounts to about 15%, but take that to 26 rolled over loans, and you get over 400%....So, limiting the amount of times still allows the people who need them to use them, but doesn't let the lender blatantly abuse the borrower just because they can.
 
As you said... "borrowers who have no other alternative source of borrowed funds"

Like I already told you, I don't have a number. But I know 400% is stupid.

then it seems you have this huge market ready to borrow your own lower cost loans
 
Because it is the cumulative rate that is the concern...On its own, one payday loan with a paid account only amounts to about 15%, but take that to 26 rolled over loans, and you get over 400%....So, limiting the amount of times still allows the people who need them to use them, but doesn't let the lender blatantly abuse the borrower just because they can.
do you think the lender will extend more credit than they expect can be repaid?
if they do, it will be the creditor's loss
so, are you wanting to protect the lenders or the borrowers?
 
Oh, I see...Nah...This is just a game that you can play discounting anything provided that you asked for as "not good enough"....Play it somewhere else.

If you think it's okay to demand personal responsibility from the other party but not your own, it's pretty clear who's lost this part of the debate.
 
but we have too many people who cant/wont control their finances themselves, who use these predatory lendors

And before there were payday and title lenders they had Luigi and his cousin Guido standing in the background with his brass knuckles.
 
do you think the lender will extend more credit than they expect can be repaid?
if they do, it will be the creditor's loss
so, are you wanting to protect the lenders or the borrowers?

Actually I would love it if these types of places were not needed....But, with the disappearance of not only math standards, but the teaching of how to budget, along with liberal government message of 'don't worry we'll take care of you, by soaking the rich'.... We breed a generation of instant gratification, self entitled, jack asses then wonder why we have so many that can't budget to pay the rent....So, in the end, I don't know...I don't want to protect people that put themselves in this situation, anymore than I want to protect the scum that prey on their need of some quick cash and exploit it to outrageous APR's....They both suck.
 
If you think it's okay to demand personal responsibility from the other party but not your own, it's pretty clear who's lost this part of the debate.

What? Wait....if anything, I am arguing the exact 180 degree opposite of a traditional conservative argument on this one....Good God, take off the blinders for a second.

If you have been paying the slightest bit of attention around here you notice how my argument is getting thanked by traditional liberals, and panned by those to the right....

That ought to tell you something....Ya think?
 
And before there were payday and title lenders they had Luigi and his cousin Guido standing in the background with his brass knuckles.

I'm not so sure we still don't....And we outlawed that practice...So, I guess short of breaking legs, anything goes....right?
 
be it payday lenders, or title lenders, they are both scum

they give a bad name to the world of banking and finance

but they provide a service.....that none other than the local loan sharks use to provide

so do we dismantle the services, and send them back to the local loan sharks?

or do we leave the businesses alone, and let the people that use them continue to get into financial straights

or do we shut them down?

those are you only two alternatives......you cant force the business to change its stripes and its lending practices

and in closing them down, are you hurting the people you are trying to help

imo, we leave them open......

if people want to pay 300% and over to borrow money short term, that is their business

what is the adage......buyer beware
 
be it payday lenders, or title lenders, they are both scum

they give a bad name to the world of banking and finance

but they provide a service.....that none other than the local loan sharks use to provide

so do we dismantle the services, and send them back to the local loan sharks?

or do we leave the businesses alone, and let the people that use them continue to get into financial straights

or do we shut them down?

those are you only two alternatives......you cant force the business to change its stripes and its lending practices

and in closing them down, are you hurting the people you are trying to help

imo, we leave them open......

if people want to pay 300% and over to borrow money short term, that is their business

what is the adage......buyer beware

anecdotal information that surprised me about this industry and customer behavior is that the borrowers are much more likely to repay these loans than those lower interest rate, conventional consumer loans. and the reasoning given was not so much because repayment curtailed the rapidly rising accrual of interest at the exorbitant rates, but because these debtors realized that if they do not repay these loans, then they will have nowhere else to turn in the future when they again need quick cash
 
What? Wait....if anything, I am arguing the exact 180 degree opposite of a traditional conservative argument on this one....Good God, take off the blinders for a second.

If you have been paying the slightest bit of attention around here you notice how my argument is getting thanked by traditional liberals, and panned by those to the right....

That ought to tell you something....Ya think?

Not really. Your case against payday lenders isn't what I have an issue with.

It's the contempt that conservatives have for applying any personal responsibility to themselves. You, OTOH, seem to condone that behavior among them.
 
here's reality: they are all of one box
that box is labeled 'the most financially risky prospective borrowers who exist'
if they were not so labelled they would have access to alternative credit at a more favorable interest rate
these are signature loans. if they had collateral, they could have pawned those assets for quick cash ... which also indicates these debtors to be judgment-proof
servicing and collecting these payday loans is going to be MUCH more difficult than recovering any less risky portfolio of loans
this pool of borrowers has already demonstrated that they are a huge risk as debtors
causing the cost of servicing/collecting those outstanding debts to be very expensive
and the charge offs, where recovery is found not to be cost effective, is also going to be enormous when compared to any other group of borrowers
so, the lender will eat a substantial portion of the principal loaned in aggregate, and will incur high labor costs to collect those accounts that are recoverable
there is no way that someone would expose their cash to such high risk lending unless they were also going to generate a high rate of interest of offset the very high costs of such lending

Thanks- I will check the links later- at work now.
 
That's right Cephus, at one time in my life I was pretty irresponsible with money. I didn't make enough and made poor decisions with credit, along with being young and partying too much. That took us into bankruptcy. We lost everything.

Since, I was at least smart enough to get the counsel of a family member that woke me up, and after some real pain and ten years we built back up to a 750+ score and own a home and have savings.

Not everyone has that family to fall back on. Nor, do they wake the hell up. All I can tell you is my experience. No one ever offered the option to pay back the loan in three payments, and they absolutey did consistently offer roll over to distressed situations. I didn't find out about extended payback until my wife worked at one.

So, you helpwd set one up. I hope you made a handsome profit.

Now you can continue to attack me personally, or we can have a conversation. Which is it?

Good for you for turning it around. Anyone can turn it around. You had a family member to help you figure it out, but credit counselers are everywhere.
 
Morning Rob...I think to be fair, Tres, and Cephus make a fair point that the original loan typically for a two week period is written for interest of $15 per $100 borrowed, So in a monthly model assuming that the original $100 is rolled over one time, that would equal an interest rate of 30% on that $100. Not horrible for someone with destroyed credit to get money lent to them. However, where I have a problem, is with the qualification process, and with the disclosure on how to get out of the loan. Also, I don't any longer think that abolishing this type of service to poor communities is a bad thing, but I do still think that the number of "roll overs" per se needs to be addressed.

Let's say for the sake of argument they limit the number of rollovers to 5. What happens when the borrower still can't pay it back?
 
I'm not so sure we still don't....And we outlawed that practice...So, I guess short of breaking legs, anything goes....right?

The point is if people are determined to act against their own self-interest there's little you, I, or the the government can do about it. I mean, let's take as an example people with a gambling addiction. Does anyone seriously think that regulating payday lenders will help gambling addicts? If a gambler saves a few dollars in interest that just means he can bet a few more bucks on the Celtics at home against the Knicks with Guido's cousin Sal.
 
Not really. Your case against payday lenders isn't what I have an issue with.

It's the contempt that conservatives have for applying any personal responsibility to themselves. You, OTOH, seem to condone that behavior among them.
Well, if it's about me, then you're in the wrong place.
 
Let's say for the sake of argument they limit the number of rollovers to 5. What happens when the borrower still can't pay it back?
Then they are SOL and should be. But the biggest thing i think is in the qualification. If someone brings home $600 every 2 weeks there is no way they should be able to write for $500.
 
Then they are SOL and should be. But the biggest thing i think is in the qualification. If someone brings home $600 every 2 weeks there is no way they should be able to write for $500.

I don't know much about how they qualify these people, or what verification you have to provide. Paychecks? But even if they could, again, using the example you gave here, I don't know that if someone brings home $600 every 2 weeks that he/she can't pay $500 at the next paycheck. There are a lot of people in this country living paycheck to paycheck.

It's incumbent upon the borrower to know what he can afford and when he can pay it back. That was always the case until the left decided that people are too stupid to take care of themselves and are victims of their own stupidity. Not that they actually say that - they use terms like "predator" instead.
 
I don't know much about how they qualify these people, or what verification you have to provide. Paychecks? But even if they could, again, using the example you gave here, I don't know that if someone brings home $600 every 2 weeks that he/she can't pay $500 at the next paycheck. There are a lot of people in this country living paycheck to paycheck.

It's incumbent upon the borrower to know what he can afford and when he can pay it back. That was always the case until the left decided that people are too stupid to take care of themselves and are victims of their own stupidity. Not that they actually say that - they use terms like "predator" instead.

Most of these stores, and I can only go by my own experience here, look at the income and will not give loans for more than they think can be reasonably repaid the next paycheck. It's all due diligence, they don't just hand out money to any Tom, Dick and Harry that comes through the door, they only give what they think is a reasonable amount, based on reasonable verification.
 
Most of these stores, and I can only go by my own experience here, look at the income and will not give loans for more than they think can be reasonably repaid the next paycheck. It's all due diligence, they don't just hand out money to any Tom, Dick and Harry that comes through the door, they only give what they think is a reasonable amount, based on reasonable verification.
Could you give an example? Then I'll tell you what I witnessed.
 
Could you give an example? Then I'll tell you what I witnessed.

An example of what? Do you not know what due diligence and making good decisions are?
 
An example of what? Do you not know what due diligence and making good decisions are?
You're saying that these places do their due diligence and only offer what people can afford, and you claim to have had a hand in setting one up. I on the other hand have a spouse that worked for Check into Cash. So, I'd really be interested in what you think due diligence is for these places.
 
Back
Top Bottom