As usual, the paternalists are making people worse off by trying to “save” them. Payday loans are expensive — not something I run off and do. But people who resort to payday loans often have to meet other obligations. Failing to do so often will cost them more.
A new study by the Federal Reserve Bank of New York makes this point. Explains the Free Library:
The study, released in November by the Federal Reserve Bank of New York, looked at two states where payday lending has been banned: Georgia and North Carolina. Authors Donald P. Morgan of the Federal Reserve and Michael R. Strain of Cornell University found that the citizens of those states bounced more checks, complained more about lenders and debt collectors, and filed for Chapter 7 bankruptcy more often. The correlation between reduced payday lending and increased credit problems, they write, “contradicts the debt trap critique of payday lending, but is consistent with the hypothesis that payday credit is preferable to substitutes such as the bounced-check ‘protection’ sold by credit unions and banks or loans from pawnshops.”
Industry critics charge that the $15 fee that payday lenders charge for a two-week $100 loan is exorbitant, amounting to 391 percent annually if the loan is rolled over for a year, accruing $15 every two weeks. The Community Financial Services Association of America, an industry group, did the math on the rates incurred with other options, and finds that a $100 bounced check garners a $54 fee, which comes out to an annual percentage rate of 1,409, and a $37 late fee on a $100 credit card balance amounts to an annual percentage rate of 965 percent. The study’s authors confirm this pattern: “Forcing households to replace costly credit with even costlier credit is bound to make them worse off.”
Message to government nannies — keep your hands off loans for the poor. You’ll only make the people worse off!
Loading ...
Thank goodness for Doug and Open Market. You guys get it. Payday loans are a personal choice.
Loan Sharks and Predatory Lenders have been used to describe Pay Day lenders because of the 3 or 400% APR charged on a $100.00 loan, for a fee of $15.00.
BUT what about a
15 day loan with an APR of 42,583.33%
Thank you Bank of America.
How can this be, you ask. Let me explain. My son has an account with Bank of America and went to a merchant to purchase an item using his debit card, for $3.50, but only had $1.50 in his account.
So as a convenience the bank allowed the debit card transaction to be approved, creating an overdraft of $2.00 for a small (ya right) service fee of $35.00.
My son did not ask for this service, in fact when we opened his account, I Specifically asked the bank employee NOT to allow this to ever happen. I would rather have my son turned down for not being able to manage his money, than to have the Bank pay for his miscalculation and gouge him with a fee that EXCEEDS any pay day loan cost either in Dollars or APR.
In 2006, consumers will also spend $4.2 billion in ATM service charges to withdraw their own money. They will pay an estimated $22 billion in NSF fees to banks and credit unions and banks will collect an estimated $10.3 billion for overdraft protection services.
Businesses will charge an estimated $57 billion in late bill payment fees (more than 140 percent of the total estimated payday lending volume in the U.S.). And credit card interest will cost consumers more than $87 billion.
If my son deposited the shortfall the day after the bank approved and paid his overdraft that would only be 638,750.0%
When will the journalists, City councils, Legislators, Center for Responsible Lending and Consumer Federation of America figure out that Banks are hurting Americans more than they are willing to recognize, BECAUSE they never pay these fees, BUT constantly attack a product they never have needed or choose to use themselves.
We need to stop blaming the payday lenders for everyone else’s irresponsibility! If I borrow 100 bucks from a friend, and am not able to pay it back, I don’t blame my friend for lending me the money! That is just stupid. So why are we blaming our payday lender friends for providing a great service? In a recent article by ex senator and presidential candidate George McGovern, he says, “[p]ayday lending bans simply push low-income borrowers into less pleasant options, including increased rates of bankruptcy,” Mr. McGovern rightly poses the question: “Why do we think we are helping adult consumers by taking away their options?”
Later in the article, he says, “[t]he nature of freedom of choice is that some people will misuse their responsibility and hurt themselves in the process. We should do our best to educate them, but without diminishing choice for everyone else.”
This is how we need to look at this topic. Leave the payday loan stores alone and look for other options. Instead of taking away payday lenders, beat them at their own game by giving consumers even more alternatives!
Because of financial crisis the demand for payday loan is increasing that’s why this industry is fast growing today. Nowadays predatory lending is also very prominent and because of this some says that payday loan is a bad solution for our financial problem and the reason of our being poor. We always blame those payday loan companies about putting us in debt and the reason why we cannot escape poverty. But the question is why do we run to a payday loan company like no fax payday loans? Of course because some of us, our salary is not enough for the expenses we need to pay. Oftentimes, we are always short in cash that’s why we run to a payday loan company for help. Because of desperation to have money we forgot to know if the company we have chosen is the right company for us. I personally not in favor of banning payday loans because there are lots of people that will be affected. First, those people who are working for a payday loan companies will lose their job. Second, those people who are average earners that sometimes find it hard to live well with their small amount of salary. There are really some payday loan companies that have no concern with their consumer that they actually lure them to debt trap but not all payday loans are like that. Because of one’s fault all will suffer.
Post Courtesy of Personal Money Store
Professional Blogging Team
Feed Back: 1-866-641-3406
Home: http://personalmoneystore.com/NoFaxPaydayLoans….
Blog: http://personalmoneystore.com/moneyblog/
The payday loan industry has been the prime target for corrupt politicians, from all sides, seeking an increase in voter support at the expense of what’s best for their citizens. Governors of several states including, Georgia, North Carolina, and Oregon completely drove payday loan companies out of their states. The negative effects of driving out Payday Loans companies from these states, appears to have not been what was best for its’ citizens. For instance, in Georgia, the bankruptcy filings, bounced checks and foreclosures all skyrocketed after the cash advance product was done away with. In spite of these negative statistics, following the closure of payday loans in these states, several other governors continue to try and follow suit. Top national politicians, such as presidential hopeful Barack Obama, are now stepping into the arena in hopes of wiping the industry completely off the map. Should such efforts deem successful, the possibility is very real for increased unemployment rates, more debt, more foreclosures and an even more crippled economy.
The payday loan industry has recently been under siege by politicians from every party. The governors of Oregon, North Carolina, and Georgia completely banned the payday loan industry in their states. However, the decision to eliminate payday loans is not in the best interest of the people who live in those states. For example, in the state of Georgia, bankruptcy filings, bounced checks, and home foreclosures all suddenly increased after payday loans were banned. Although it’s been proven that the number of bankruptcy, bad checks, and foreclosures rise when cash advances are prohibited within a state, many governors of other states are attempting to pass the same anti-payday loan legislation. High-level politicians are hoping to eliminate payday loans from the entire United States. If this actually happens, it is quite plausible that there will be even more unemployment, debt, bankruptcy, and foreclosures in our already struggling economy.
Post Courtesy of Personal Money Store
Professional Blogging Team
Feed Back: 1-866-641-3406
Home: http://personalmoneystore.com/NoFaxPaydayLoans….
Blog: http://personalmoneystore.com/moneyblog/
When you built a course of action on a deceived foundation, you can certainly create a rocky aftermath. Some politicians are looking to wipe out the payday loan industry and sadly, some have succeeded in many areas. This action reflects the groundless idea or assumption that payday lenders fall under the same category as illegal loan sharks. This ongoing challenge to pass this legislature attempts to restrict or take away your ability to get a payday loan for unforeseen emergency cash needs. Please do not be misinformed and educate yourself, friends and family on the right of financial independence.
Post Courtesy of Personal Money Store
Professional Blogging Team
Feed Back: 1-866-641-3406
Home: http://personalmoneystore.com/NoFaxPaydayLoans….
Blog: http://personalmoneystore.com/moneyblog/
Every Presidential debate in the era of television is quite the news item. Many Americans watch in order to gauge which candidate is going to pursue policies that they feel are best, in order to find out who it is they think they should vote for. Many voters today in America are becoming or have become disillusioned with our leaders and the political process, and so watch things like the debates with limited expectations, knowing that direct questions will most likely not be answered, and will sound like sound bites. The major newspapers, such as the New York Times and the Boston Globe, hailed the debate as having “forced cordiality†and being “mercifully free†of personal attacks, and that was very true; neither candidate resorted too much to character assassination. McCain continued with “staying the course†and pursuing domestic drilling policies. (Hmmm….I wonder just who he was listening to on that one.) Obama was still criticizing Republican policies which he says got us into this mess of a recession in the first place. If the election were based on the performances on the debate , there’d be no clear way to say who it was that had won. America needs a clear proposal for action. Obama’s views on “
predatory lending†which basically is sanctioning payday loan lenders is not a real solution. It’s basically an appeal to the banking lobby.
Post Courtesy of Personal Money Store
Professional Blogging Team
Feed Back: 1-866-641-3406
Home: http://personalmoneystore.com/NoFaxPaydayLoans….
Blog: http://personalmoneystore.com/moneyblog/
Not all payday loans are bad it depends on the situation. Some payday loans lenders will only allow you to borrow no more 2 loans. That is to protect the borrower from having to borrow from them all the time. Its just depends on the situation. Shopping around and comparing loans is the best thing to do.
myquickpaydayloans
We are looking to advertise on financial industry websites or set up trade partnerships with any site who's users might need a short term loan or small financing. If you are interested in trading content for links let us know.
We offer linking, blogging, bookmarking, social profile set up, and video commentary. If these do not interest you we have an affiliate program that pays generous commissions of $25 per qualified loan application
We can also just straight out pay you per link, per month, per click or per impression. Which ever way you wish.
Get a hold of me
David Johnston
Personal Money Store
509-954-3437
reply to affiliate@personalmoneystore.com
Think the Philadelphia Phillies are the only story in Pennsylvania this week? Think again. Both John McCain and Barack Obama are braving the torrential downpour that forced umpires to call the Phillies-Rays World Series baseball game on Monday night. Election Day is the temporary finish line for the weary candidates, but for the winner, that’s merely the first signpost on a great marathon. Morning rallies by McCain/Palin and Obama (where’s Biden?) were attended by thousands, McCain in Hershey and Obama spreading his message to the open-eared at Widener University outside Philadelphia. McCain says he’ll fight on, despite what the polls and pundits predict, Palin defends the attack mentality the GOP has taken against Obama/Biden and Obama maintains that McCain will bring America “more of the same,†straight from the George W. Bush menu. For those of us who have ever used quick loans, that more of the same just might mean that they will still be available, that we will hold on to that much of our financial freedom. Under a Democratic president and dominant Democratic Congress, we may not have that choice.
Post Courtesy of Personal Money Store
Professional Blogging Team
Feed Back: 1-866-641-3406
Home: http://personalmoneystore.com/NoFaxPaydayLoans….
Blog: http://personalmoneystore.com/moneyblog/
Payday Loan is such a huge help especially at present times where consumers are going through a lot of economic hardships, I think taking away additional sources of financial help is not the way to go.
Election Day is behind us, and America has a new leader. The U.S. has chosen “change†by electing Barack Obama. There is no doubt that change is in store for the United States. Whether the United States changes for the better or for the worse is yet to be seen. It’s obvious that Americans believe Obama will bring a positive change to our country. Obama has promised the U.S. a lot of things like lower taxes for the middle class, putting a timeline on the war in Iraq, and trimming the federal budget “line by line.†What many Americans don’t realize is that Obama has also supported the elimination of the payday loan industry. Obama thinks doing away with the payday loan industry will protect low-income, and often minority, families from being victimized by predatory lenders. However, getting rid of the payday loans is a violation of our financial freedom. Maybe Obama will give America what it needs, but taking away our financial freedom isn’t a great start to creating positive change.
Click to read more on Payday Loans
the Federal Reserve Bank of New York, looked at two states where payday lending has been banned: Georgia and North Carolina. Authors Donald P. Morgan of the Federal Reserve and Michael R. Strain of Cornell University found that the citizens of those states bounced more checks, complained more about lenders and debt collectors
We all should learn or care about saving some of your biweekly or monthly income. We can put 10%, 15%, 20%, or 25% of our net income into a savings account, a piggybank, or a small safe. The more we save, the less likely we’re gonna take out payday loans or use credit cards. We start saving some of our income by finding cheaper ways of eating, transportation, other needs; and cutting out unnecessary goods or service such as cable. If we have credit or financial problems, we souldn't don’t to payday loans or a group of credit cards called “subprime credit cardsâ€.They’ll only make our credit worse.
This is optional, you don't have to apply if you want to. First, check your credit reports for accuracy, and then try to apply for Capital one credit card; it best credit card if you have no credit or had credit problems.