Payday/Title Loans

Here’s the latest editorial calling for limits on the interest rates charged by lenders. Dan has a round up of other coverage. I’ve commented on this “problem” here, and here.

Dan says he’s at odd with himself about the issue. Me too. I have no doubt some folks really get screwed by these loans. But for the same reason I dislike anti-gambling laws, helmet laws, the war on drugs, and seat belt requirements, I can’t join the chorus of opposition to payday/title loans. I’m just not big on protecting people from themselves.

I’ve suggested in the past that a good solution would be making sure the lenders fully explain the loan in clear, unambiguous, and easily understandable language. If everyone knows what they are doing, I have no problem with the results. Currently, though, I’d be willing to bet a large number of borrowers enter these transactions without fully understanding how the interest rates work. Those are the problem cases, and making sure everyone had equal information would help eliminate them while leaving the loans available for those people who really need them.  

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7 Comments on “Payday/Title Loans”

  1. Willie Says:

    Wheeler, these scumbags are predators. Payday loans, rent to own, LD telephoners tricking old people, fly by night contractors; they are all trying make a buck, or alot of bucks, off people less fortunite than we are. They use to be call bunko artists. My way of thinking is that they are no better than a thief with a gun and should be judged by the laws accordingly.

  2. KC Says:

    usery laws were a good thing, and now that the banking/credit card indusrty has severely diminshed the relief afforded by bankruptcy , it seems reasonable to afford some relief to consumers on the rate side

  3. Mark Says:

    What’s legal and not legal is, to a certain extent, arbitrary. Some laws are obviously aimed at protecting people from harm from others (murder, theft, robbery, b&e and so on). Some laws are intended to protect people who may not be fully able to protect themselves in certain circumstances (minors, for example). Other laws or proposed laws are obviously intended to protect people from harm (or perceived harm) of which they are fully cognizant and freely choose (gambling or prostitution). From that point it only gets grayer. Laws or at least restrictions on payday and title loans are in that area. They are at least debatable. I think the people who do it are scum and one step (if that) removed from other scam artists who tell actual lies (for instance, telling someone they are a party to a class action settlement, and if they send $500 to pay fees and taxes, they will get their $10,000). I guess in principle I could agree that the government doesn’t need to hold everyone’s hand all the time, but I wouldn’t complain much if this type of business were more strictly regulated.

  4. walt moffett Says:

    What I found interesting was a series in the Montgomery paper about who owns these things. Amongst other factoids was that state senator Barron, friend of the common man owned an interest in some until he ran for re election.

  5. Moffett, seems like I read the same thing, and that he wasn’t the only one who owned an interest.

  6. grace Says:

    hmm the problem is not paydya — its us –we need to improve our self to avoid debt and then avoid payday loans

  7. Dev Says:

    There are places where they do explain it to the customers before they sign the papers. I agree that if these people do need to protect themselves. They know what they are getting into and they aren’t being responsible about it. Only take out what you can and be sure that you can pay them back on time, if not then don’t do it at all.

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