Payday Lenders
Aside from the Biennium Budget, one of the hottest issues in our State House is the Pay Day Lending industry and how to close the apparent loop hole they have found. Personally, I cannot understand why this is such an issue. Opponents of these loans state interest rates of over 350% as the prime reason to shut them down and claim that these are predatory loans. A $100 two week loan will cost $15, which opponents claim is excessive and predatory. Yet, if it were not for these institutions being available to make these short term loans and a person wrote a check that subsequently bounced, the bank will charge them a $30 fee, the business that they wrote the check to will charge them a $25 fee, and they still owe the original $100. Which is worse, paying the $15 interest to a Pay Day lender or the $55 penalty fees for bouncing a check? No one is going to mortgage a home through a Pay Day lender, but this industry provides a needed service at a reasonable price that is not available anywhere else.
If the Legislature is successful in its bid to eliminate the Pay Day loan industry, where will the people who have been using their services go to borrow money? Banks and Credit Unions will not make these short term loans so the individuals that have been utilizing these short term loans will now be left out in the cold. They will not be able to purchase parts to repair their car to get to work so now they lose their jobs. I am sure that they will be thankful that the Legislature was looking out for their best interest as they lose their job and walk to the unemployment office.