GOP assault on the poor continues: payday lending returns

And the sharks are smelling blood in the water:

A bill that would bring back payday lending to North Carolina has attracted a powerful new co-sponsor: Senate Rules Committee chairman Tom Apodaca. The support of Apodaca, R-Hendersonville, added to the heavyweight lobbyists that the industry has retained, makes it a bill to be reckoned with.

And heading the pack of lobbyists is Rep. Harold Brubaker, who must be dizzy from the speed of the revolving door. If you decide to sit in on any committee discussions or debates, you'd better roll up your pant-legs first, because the shit is getting deep already:

Sen. Jerry Tillman, a Republican from Archdale and the primary sponsor of the measure, says that it is first and foremost a jobs bill. “I’m trying to do something simple for everyday working people,” he said.

Tillman said the bill was requested by individual constituents who are struggling financially. “I’ve had people ask me,” said Tillman, “Why can’t we have another chance at (payday lending) and do it right? We have a need and can’t get the money.”

Good Lord. If you're going to lie about something, at least make it something marginally believable, like a 50 lb catfish story or an alien abduction.

Fictional encounters aside, there are some pretty strong historical and reality-based arguments against payday lending:

One common argument is that payday loans serve a group of people that can't get needed loans any other way. Shouldn't people be free to enter into contracts with one another, even if the terms seem outrageous to others? There are two problems with this argument. First, as a commenter pointed out, it can also be used to justify moral wrongs like slavery, too -- although slavery wasn't a perfect analogy. A better one would be "indentured servitude," where poor people would trade away their freedom for a period of years in return for a cash loan. Civilized countries decided that these agreements, although they were legal and enforceable contracts, were immoral and must be stopped.

This argument also ignores a critical fact: Big banks -- the same parties who have denied people more legitimate sources of credit -- are deeply embedded in the payday loan industry. Wells Fargo has funded more than one-third of all storefront lenders, Bank of America's a major shareholder in payday lender QC Holdings, and banks have been working with payday lenders to evade usury laws.

Banks force people into a financial squeeze where they have no other credit options by denying them traditional loans and credit cards, then profit from rapacious payday lenders who charge them rates that can approach 400% to 800% in annual interest. Payday loans don't help an "underserved population": they're part of an exploitative, interconnected system.

The Right's ideology when it comes to dealing with the issue of poverty is so full of holes it makes Swiss cheese jealous. They claim that the best way to fix the problem is to encourage poor people to save whatever they can to accumulate wealth. But the very best way for those on the bottom to generate wealth is to become a homeowner, but Republicans think that's a bad idea. But a loan which creates negative wealth, and requires all their potential economic growth energy just to keep the red from getting redder, is a great idea. And shredding the safety net is somehow healthy, even though it devastates the lives of those families affected.

One can only surmise from this logic that Republicans don't want the poor to be empowered, which hearkens back to the European monarchies of the 17th and 18th Centuries. 236 years of the Democratic experiment, and these are the resulting conclusions of the Republican Party. Some of us have learned nothing.

Comments

payday lending

Elizabeth Warren just demonstrated in Senate hearings that the big banks will not be brought to trial no matter what they do. This is just a way to extend that down to local leeches acting for the big banks. I hope that the divers for the bottom of the barrrel hit their heads on it. This is like Marco Rubio's "response" to the SOTU the other night: a rehash of the past among smaller players.

Yeah, the money's got to come

from somewhere. If the big mega-banks weren't hooked in to the loan sharks, they'd probably lobby to have them shut down.

A simple look

We can use the same logic against payday loans to attack hotel rooms. After all, you can obtain a mortgage on a 3,000 square foot house for less than $2,000. Yet when someone rents a room, often less than 600 sq feet, they are charged $125 a night. Well over the reasonable cost of housing. Yet no one blinks an eye.

Now, consider that you are struggling financially and the bills are coming due; perhaps it's the electric bill that is in danger of being missed. Isn't it reasonable to take out a loan to pay off the bill rather than face living in the dark?

Why are the people you are "protecting" so unable, in your mind, to make a value based decision regarding their own self interests?

Or, put another way, why don't you loan money to those folks who might otherwise enter into contract with payday lenders?

The difference is, one night in a hotel room

won't end up costing you the equivalent of a mortgage payment and several years of stress and harassment before it's over.

Is today "Troll Day" or something? Did I forget to mark my calendar?

won't end up costing you the

won't end up costing you the equivalent of a mortgage payment and several years of stress and harassment before it's over.

Well, neither will the payday loan if the terms of the contract are followed. Need $100.00 for electricity until Friday? Payday loans make that possible.

However, let's say that I agree with you in that people are unable to make decent decisions regarding their own self interests; what is the alternative to payday loans?

Loan sharks?

Is today "Troll Day" or something? Did I forget to mark my calendar?

Troll?

I'm a troll for offering a differing opinion?

Been doing this a long time

I'm a troll for offering a differing opinion?

After a while, you develop kind of a sixth sense about these things. Aren't you a blogger? You might even have that skill yourself.

troll

He might be tea party gnome and all round conservative tool Patrick McHenry. The Mad Hobbit of Mecklenberg county has never been one to let principle get in the way of greed and for those of his ilk, greed is the highest level of endeavor.

David Esmay

Payday lending is ok with me

as long as they do not have to show a photo-ID. If the borrower was not forced to show a photo-ID I doubt very seriously any money would be loaned. Simple solution.

I get your point about IDs...

...though not sure I agree with your main premise about it being OK. In one sense I do agree because it's business and on the one hand, I dislike excessive government meddling in business....on the other hand, there are centuries of precedent for legislating against usury which is what a lot of these payday lenders are using as a business model. And as a career soldier, I've had no end of headaches from these vultures parked just outside the front gate of any given military base, waiting to drop a loan with double or even triple digit interest on a naive 18-year old troop who just got off the farm. Luckily, the NC Ledge finally cracked down on that odious practice at the urging of the brass at Bragg and LeJeune.