Personal Finance: Payday loan vultures circle over festivities
The holidays can be especially stressful for those on a tight budget. For someone living check to check, it is tempting to consider borrowing to finance a few gifts or to cover additional expenses. Many of us think of credit cards as the obvious solution, as long as we pay off the balance immediately.
But a certain segment of the working population without access to retail credit will be enticed to consider a pernicious alternative: payday loans.
Sometimes referred to as check cashing services or cash advance stores, payday lenders provide phenomenally expensive short-term loans. There are an estimated 20,000 loan stores in the United States, plus a growing number of online operations competing for the attention of the less sophisticated and most vulnerable members of the working poor. According to an industry analyst, payday lenders made over $40 billion in loans and reaped $7.4 billion in revenue last year.
The Dodd-Frank
financial reform mandated several new regulations relating to credit cards, but notably failed to curtail the usurious practices of the check-cashing industry. Seventeen states (including Georgia) have outlawed these businesses altogether, but regrettably Tennessee is not one of them.
Tennessee and several other states have constrained the most abusive practices of these entities by restricting the number of loans that can be made to an individual, capping the maximum loan amount, and limiting the effective interest rate (albeit at still penury-inducing levels).
Remarkably, at least 30 of these lenders are owned by Indian tribes and are therefore exempt from state laws regulating the industry.
The folly of a payday loan can be seen in the following typical example. A borrower writes a post-dated check to the lender for $500, and receives a loan for $425, at a nominal interest rate of 17.65 percent. When the loan comes due (typically in 14 days), either the borrower must repay the loan with fees and interest, or the lender will deposit the post-dated check. In case you thought credit cards had high annual interest rates at 36 percent, check out the payday lender at an APR of 459 percent.
Payday Loan Online For Georgia Residents - News
Sometimes referred to as check cashing services or cash advance stores, payday lenders provide phenomenally expensive short-term loans. There are an estimated 20000 loan stores in the United States, plus a growing number of online operations competing
"The rates are so lucrative for those that ignore the law," said Barnes, a Democrat who pushed a statewide crackdown on high-interest payday loans when he was governor from 1999 to 2002. Some in the military are too busy with moves between bases and
The Military Lending Act was enacted in 2007, after a report by the Department of Defense found that 17 percent of service members used payday loans and that “predatory lending undermines military readiness, harms the morale of troops and their
Maybe the guy wants in on some of Newt's Freddie Mac lobby payday. Its up to $1.6 million now. My gosh! The mans not running for office, Drooly. He is only endorsing Gingrich. The fact he lost his race means nothing. I don't think anyone is going to
Even without debt, the Stefanescus live payday to payday, carefully weighing every expense. Their only savings are the 42-leu monthly government school subsidies for 10-year-old Andreea and 9-year-old Vlad. "That is not the ace up our sleeve.
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