Senator Hagan pens op-ed on payday lending

Kay gets a blue star for taking the time to educate the public, especially since she's not (currently) running for office:

These loans seem innocuous enough. Borrowers offer checks dated days later in exchange for a "short-term" loan. Most people borrow small amounts of money to cover unexpected expenses, like a medical bill or car repair.

But there's a catch. Predatory lenders trap borrowers into an endless cycle of debt.

As an NCO at Ft. Bragg, I witnessed scores of soldiers (and their families) get caught up in these cycles, and it rarely ended well. When payday finally did come around, the money went to cover previous borrowing, and new borrowing began almost immediately. Homes, cars and other personal possessions were lost, and marriages crumbled like sandcastles on the beach.

Payday loans are marketed as "short-term cash advances," but the terms are egregious. The borrower must repay the loan in full, often within just a few days. When the borrower is short on cash for the full loan, the creditor issues another new loan. The cycle repeats. And repeats.

Studies show borrowers often remain indebted for many months after the first payday loan. The loans carry interest rates of more than 400 percent, which is more than 10 times what most credit card companies charge risky borrowers. The vicious payday loan cycle can ultimately send a hardworking family into bankruptcy.

For those in the "free market" and/or "personal responsibility" crowd, predatory lending doesn't represent freedom, it's a wealth-destroying trap that takes away freedom and makes prosperity nearly impossible to attain.