• 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!

350 Percent Interest Rate? Senators Bankrolled By Payday Lenders Can Live With That

Rogue Valley

Rogue Valley

Lead or get out of the way
DP Veteran
Joined
Apr 18, 2013
Messages
94,329
Reaction score
82,719
Location
Barsoom
Gender
Male
Political Leaning
Independent
350 Percent Interest Rate? Senators Bankrolled By Payday Lenders Can Live With That

By Alex Kotch
International Business Times
11/17/17

2f33311aec41b6edcbc1429b9c627a2e--direct-payday-lenders-term-loan.jpg


A Democratic senator is leading the way to allow payday lenders to escape basic consumer protections. In a rare bipartisan effort in July, Sen. Mark Warner, a former venture capital executive representing Virginia, introduced the Protecting Consumers' Access to Credit Act of 2017 (S.1642) with three cosponsors: two Republicans and one Democrat. The bill would allow lenders to ignore state interest-rate caps by partnering with a national bank. Most states have interest rate caps of 36 percent, but 15 states have none at all, and the bill could mean that millions of Americans would face rates of 350 percent or more. According to the Consumer Financial Protection Bureau (CFPB) — which was established under the Dodd-Frank Act in 2010 to help defend consumers against the fraudulent practices of financial firms that led to the global financial crisis of 2008 — over 19 million American households use payday loans, which include an initial fee of around $15 to $20 per $100 borrowed. After two weeks, 70 percent of these borrowers have to then take out a second loan to cover the first. President Donald Trump is expected to appoint current Office of Management and Budget Director Mick Mulvaney as interim director of the CFPB, leaving the agency in the hands of someone who wants to do away with it.

The payday lending industry donates to many House and Senate candidates each election cycle. From 2015 to 2016, companies, corporate political action committees and individuals in the industry gave over $2.8 million to campaigns and independent political groups, 82 percent of which went to Republicans. So far this year, the industry has reported nearly $840,000 in contributions, with over 90 percent going to Republicans. But regarding sponsors of friendly legislation, the payday lenders do not discriminate by party — both Democrats and Republicans who sponsored the bill are some of the industry’s biggest recipients of campaign cash. A bipartisan trio of representatives introduced the companion bill in the House, and all have received campaign donations from the payday lending industry. Research shows that a “particularly effective” strategy for helping shape public policy is a combination of campaign donations and lobbying — and payday lenders and their trade groups don’t just donate to candidates they hope will support legislation that boosts their interests. Three trade associations representing lenders have spent a combined $1.6 million on lobbying in 2017 to lobby Congress on specific legislation and issue areas, according to federal lobbying records reviewed by IBT.
Click to expand...

Yet another poignant example of the executive/legislative branches in bed with industry lobbyists and donors.
 
apdst said:
If the government hadn't made it so hard for poor people to get a credit card, this wouldn't be happening. Poor folks used to use credit cards to fill in the gaps between paydays. Now, thanks to government regulations, they're forced to use payday loans.
Click to expand...

The goal is to make poor people ever more dependent on the government.
 
JMaximus said:
The goal is to make poor people ever more dependent on the government.
Click to expand...

apdst said:
If the government hadn't made it so hard for poor people to get a credit card, this wouldn't be happening. Poor folks used to use credit cards to fill in the gaps between paydays. Now, thanks to government regulations, they're forced to use payday loans.
Click to expand...

Your position is so weird. From what I've seen on this board over the years, Republicans don't usually argue that it should be easy for people to get debt. You do know that's what a credit card is for right? Debt beyond what you can support? The hard numbers don't lie. Credit cards and mortgages are the single largest contributors to most of people's economic problems. Do you even know what the Republican position on this should be? I don't think you do if you're saying that we should make it easier for people to live far beyond their means. The older I get, the more I come to believe the traditional Republican solution is a sensible position to take on poverty while also allowing debt alleviation, forgiveness, and advocating for higher wages.

Just so you know, millions of Americans have crippling credit card debt. Most of the time, they're people who actually understand the financial vehicles they've put their money into. You know, investments and such. However, even they have gotten it wrong. What you're saying is that it should be easier for the most likely to be uneducated, without means, and destitute of people to incur debt. Yes, poor people often get there because of terrible debt management. Most of the men I knew growing up were broke, black, and had gotten there by constantly asking someone else for money.

What you're saying is that we should make easier for them to incur more debt instead of giving them a better wage, and treating them with the same decency we take with dogs in our society? You know, dogs people are willing spend 8000 dollars on but will still complain that they've got to also give their employees healthcare benefits? You know, allowing employees wages to actually keep up with inflation without the obvious? Not giving employees (at best) 3% raises in wages, knowing full well that inflation will eat up half of that in any given year and patting ourselves on the back for it not being worse? Are these things REALLY that hard to achieve? Do we really have to go in the direction of making easier for people to cripple themselves with debt before we try anything else?

Is paying people higher wages so that they don't have to go to these lenders, really that terrible of a solution? What about not letting companies hold billions in other countries? Is that really that hard? I think you're arguing for something you really don't benefit from but you're doing it because you think it's an us against them world. But it really isn't.
 
Last edited:
apdst said:
If the government hadn't made it so hard for poor people to get a credit card, this wouldn't be happening. Poor folks used to use credit cards to fill in the gaps between paydays. Now, thanks to government regulations, they're forced to use payday loans.
Click to expand...

Trading one poison for another. Get in bad with a payday loan and you're toast in 6 months. Get in bad with a credit card and you're toast in a year. What does it matter? The whole illusion of "if I just had some more money now I can pay it off later" is something any non well off human experienced in their teens or early twenties and then learned it never works and to never do it again. Same thing with having a low bank account balance and the accidental overdraft. It's just predatory money changers shooting fish in a barrel.
 
Hatuey said:
Your position is so weird. From what I've seen on this board over the years, Republicans don't usually argue that it should be easy for people to get debt. You do know that's what a credit card is for right? Debt beyond what you can support? The hard numbers don't lie. Credit cards and mortgages are the single largest contributors to most of people's economic problems. Do you even know what the Republican position on this should be? I don't think you do if you're saying that we should make it easier for people to live far beyond their means. The older I get, the more I come to believe the traditional Republican solution is a sensible position to take on poverty while also allowing debt alleviation, forgiveness, and advocating for higher wages.

Just so you know, millions of Americans have crippling credit card debt. Most of the time, they're people who actually understand the financial vehicles they've put their money into. You know, investments and such. However, even they have gotten it wrong. What you're saying is that it should be easier for the most likely to be uneducated, without means, and destitute of people to incur debt. Yes, poor people often get there because of terrible debt management. Most of the men I knew growing up were broke, black, and had gotten there by constantly asking someone else for money.

What you're saying is that we should make easier for them to incur more debt instead of giving them a better wage, and treating them with the same decency we take with dogs in our society? You know, dogs people are willing spend 8000 dollars on but will still complain that they've got to also give their employees healthcare benefits? You know, allowing employees wages to actually keep up with inflation without the obvious? Not giving employees (at best) 3% raises in wages, knowing full well that inflation will eat up half of that in any given year and patting ourselves on the back for it not being worse? Are these things REALLY that hard to achieve? Do we really have to go in the direction of making easier for people to cripple themselves with debt before we try anything else?

Is paying people higher wages so that they don't have to go to these lenders, really that terrible of a solution? What about not letting companies hold billions in other countries? Is that really that hard? I think you're arguing for something you really don't benefit from but you're doing it because you think it's an us against them world. But it really isn't.
Click to expand...

You spent an awful lot of words telling folks what you think they said but very few actually responding to it...
 
People are not taught how to spend and save money. Our consumer driven economy runs on buy now pay later. You can raise wagess untill the cows come home and nothing will change unless you educate people. In my time at a bank I saw just as many 200K a year folks as 2OK a year need financial help, both suffered from fundamental lack of knowledge about how debit credit and savings work.
 
Verax said:
Trading one poison for another. Get in bad with a payday loan and you're toast in 6 months. Get in bad with a credit card and you're toast in a year. What does it matter? The whole illusion of "if I just had some more money now I can pay it off later" is something any non well off human experienced in their teens or early twenties and then learned it never works and to never do it again. Same thing with having a low bank account balance and the accidental overdraft. It's just predatory money changers shooting fish in a barrel.
Click to expand...

When I wasn't working I could use credit cards to borrow nearly three months' income on less than $200 / month repayments.

Now that I am employeed, I'm paying the debt down quickly. I have an excellent credit rating.

There's nothing wrong with borrowing or making borrowing easy (and cheap).

It's certainly not acceptable to make borrowing artificially difficult or expensive just because some folks like to be fools with other people's money.
 
JMaximus said:
When I wasn't working I could use credit cards to borrow nearly three months' income on less than $200 / month repayments.

Now that I am employeed, I'm paying the debt down quickly. I have an excellent credit rating.

There's nothing wrong with borrowing or making borrowing easy (and cheap).

It's certainly not acceptable to make borrowing artificially difficult or expensive just because some folks like to be fools with other people's money.
Click to expand...

Most people that use payday loans or credit cards to cover income gaps end up going under, paying back all of it or more, but still owing 3 times what they originally borrowed. Just because you didn't and things worked out doesn't make it a good idea. If you were so good with money and intelligent you would have 3 months salary saved up instead of paying interest and taking a risk with other people's money.
 
Verax said:
Most people that use payday loans or credit cards to cover income gaps end up going under, paying back all of it or more, but still owing 3 times what they originally borrowed. Just because you didn't and things worked out doesn't make it a good idea. If you were so good with money and intelligent you would have 3 months salary saved up instead of paying interest and taking a risk with other people's money.
Click to expand...

He doesn't get that giving people the ability to create fast debt in any direction is foolish as hell. Jesus hated money lenders for a pretty pragmatic reason that had nothing to do with God and everything with economic. He whipped them because they created communal debt and traded at skull busting interests. We wont beat them today and that is good. However we shouldn't make it easier for entire communities to become generationally indebted because of a cycle of lending and acumulating debt that is never paid back.


Sent from Donald's hair using Putin's Blackerry.
 
JMaximus said:
You spent an awful lot of words telling folks what you think they said but very few actually responding to it...
Click to expand...

Okay, I'll make it easier. The solution to people not depending on government isnt closing down places like this. Its paying people so that they dont have to depend on them. I have milk in my fridge because i am paid enough to the point where i can afford a few creature comforts. Ps4, laptops, christmas tree. Its not because i make HUGE amounts of money - but i make enough to have them. I dont think i work any harder than some single mom but i also dont think she should be paid so little that she cant afford a few comforts like being able to eat out at a restaurant a few times a month. But like a pizza place that isnt in the hood.

The solution is to not allow the guy working 30 hours a week by clicking to hide his money like the people in the panama papers do. Repatriate that money, tax it. Joe Plumber doesnt have the power / lawyers / con artist to hide his taxes away somewhere. Sneaky economic maneuvering that i admit seems legal should not be allowed to pass while millions arent equitably paid enough to actually enjoy and learn about society.


Sent from Donald's hair using Putin's Blackerry.
 
Nothing worse than cash advanced places. They are a predator on people.
Same with credit cards. They charge 20-25% interest in their nonsense.
I agree that someone might need help at times.

But using those places puts you further in the whole.

They charge huge late fees and put people in worse shape.
T isn't like the people coming there can afford to pay it back ether.

So someone comes in who needs a 100 bucks. They get it and owe 150.
If they don't pay it on time they owe more later and it gets worse.
 
Hatuey said:
He doesn't get that giving people the ability to create fast debt in any direction is foolish as hell. Jesus hated money lenders for a pretty pragmatic reason that had nothing to do with God and everything with economic. He whipped them because they created communal debt and traded at skull busting interests. We wont beat them today and that is good. However we shouldn't make it easier for entire communities to become generationally indebted because of a cycle of lending and acumulating debt that is never paid back.

Sent from Donald's hair using Putin's Blackerry.
Click to expand...

When I drive through the downtown of various neighborhoods and see dozens of them all over I just shudder. They must be doing great business to exist in such numbers. Imagine if that money was instead used to purchase food, healthcare, etc. The community would be so much better off. Just another thorn contributing to poverty.
 
I know they can be bad, but there was a time in my life when I used them to get me through a couple tough patches. Of course I paid them off on time (the next payday) so I didn't make out to bad.
 
Verax said:
If you were so good with money and intelligent you would have 3 months salary saved up instead of paying interest and taking a risk with other people's money.
Click to expand...

Not if I'm poor. Which I was.
 
JMaximus said:
Not if I'm poor. Which I was.
Click to expand...

Pay day loans places scam poor people this is evident and why states have very heavy laws on them, and they are heavily regulated. If you were short 100 bucks this week now you are going to be short 150 bucks the next.

You lose 150 out of your next check.
 
ludin said:
Pay day loans places scam poor people this is evident and why states have very heavy laws on them, and they are heavily regulated. If you were short 100 bucks this week now you are going to be short 150 bucks the next.

You lose 150 out of your next check.
Click to expand...

Thanks to easy access to cheaper borrowing on better terms I've never needed to use payday loans.
 
JMaximus said:
Thanks to easy access to cheaper borrowing on better terms I've never needed to use payday loans.
Click to expand...

Yet a lot of people use them. The same people can't afford credit cards either and their credit scores
Are so bad they only qualify for horribly bad interest rate cards that can go up to 200%.
 
ludin said:
Yet a lot of people use them. The same people can't afford credit cards either and their credit scores
Are so bad they only qualify for horribly bad interest rate cards that can go up to 200%.
Click to expand...

So what's the fix here?

Making borrowing easier and cheaper, of course.
 
This issue goes back many, many years....

In state after state that has tried to ban payday and similar loans, the industry has found ways to continue to peddle them.
Click to expand...
Click to expand...

FEDERAL REGULATORS EARLIER this month unveiled new rules aimed at reining in payday lenders and the exorbitant fees they charge. Now expect to hear a lot of what one payday lender named Phil Locke calls “the lies we would tell whenever we were under attack.”
Click to expand...
Click to expand...

In the 1990s it was a problem for the military. The young ones, not being good with their money, would get into a habit of living paycheck to paycheck. Some, without families, would spend their money over the course of the first week and then head out to one of these places to get some cash for the weekend before the next payday. It was a vicious cycle that got many in trouble. Some base Generals placed these businesses on the unauthorized list.
 
Last edited:
apdst said:
If the government hadn't made it so hard for poor people to get a credit card, this wouldn't be happening. Poor folks used to use credit cards to fill in the gaps between paydays. Now, thanks to government regulations, they're forced to use payday loans.
Click to expand...

Well, the government made it easier for the poor to get home loans and look how that worked out during the Great Recession. The answer is not to start opening the doors to Platinum Cards. If the minimum wage was what it should be then these people wouldn't be prey for the money lender vultures and robber barons. And you people wonder why the poor need something like an "affordable" care act. Most of the poor are poor only because their government has failed them.
 
You must log in or register to reply here.
Back
Top Bottom