Payday lenders: Service or trap?

[obie7661]

Ohio lawmakers are divided over whether high-interest loans are hurting the poor

http://www.dispatch.com/dispatch/content/local_news/stories/2007/07/23/payday_talks.ART_ART_07-23-07_A1_T77BEPN.html

[CarlE]

People are stupid otherwise these places wouldn't be open in the first place.

[Submariner]

The interest alone will kill you. The preying alone on the poor to loan instant cash is easy enough, but to pay it back with interest is tough. There are so many places open now around town, and people have multiple accounts open so they literally borrow from Peter to pay Paul. It is dangerous!!!!!

[MTown]

The question is who's responsibility is it?

IMO, the fees for those services are clearly marked. Those people know exactly what it will take it pay it back. If they then choose to take the loan, then they are responsible for repaying the money. The government can't make laws to help people manage their money better.

[massillon catholic]

It isn't much different than getting an ARM loan and then the interest rate going to high for the people to pay. As one poster stated, the terms are clearly marked. Unfortunately, most people need the money NOW and don't take into consideration what they have to pay back. I've loaned people money for years at 25% and have never had one complaint and only one person stiff me. Which I received a judgment lien against him and will get my money plus interest whenever he sells or re-finances his home. The key is giving the people a payment that they can afford to make. The majority of people really do want to pay back the money, but if they get in over their head they look to another option and that just buries them even deeper. The idea of cashing checks is nothing new. Many bars did it for years in Massillon and other towns that had many factory jobs. The hope is, you cash the check for a fee then hope they buy a lot of beer.

[jobdone]

I see By_Ryders is closed and another loan sharking place opened there. I stopped to look at a car there once and the salesman asked if I was going to finance it. I said no and he told me the only cars they sold had to be financed there. Another scam on the poor!

[DAWGH8R]

Free enterprise

[massillon catholic]

I see By_Ryders is closed and another loan sharking place opened there. I stopped to look at a car there once and the salesman asked if I was going to finance it. I said no and he told me the only cars they sold had to be financed there. Another scam on the poor!


That must mean that the sale's price is actually the amount after financing. I've never heard of something for sale and it can only be financed, but I suppose in today's world that is probably legal.

[DragonTigerNemesis]

People are stupid otherwise these places wouldn't be open in the first place.

Agreed. America is full of people that are unwise with their money. All you need do for verification of that is to stand at a convenience store checkout and watch all the uneducated poor people throw their money away on lottery tickets.

Free enterprise

Yes indeed it is. And, of course it's legal.

But just because something is legal doesn't mean it's moral, decent or an OK or right thing to do by your fellow man.

IMO, God has a special place in Hell reserved for people that own or work at the check cashing places.
And---it's right next to the place he has reserved for the mortgage people that operate just a hair's breadth inside the laws against predatory lenders.

I swear, I truly don't know how some people can sleep at night knowing that they are taking advantage of other's misfortune, desperation, below average IQ, or bad run of luck.

:kungfu:

[Kamd50]

I swear, I truly don't know how some people can sleep at night knowing that they are taking advantage of other's misfortune, desperation, below average IQ, or bad run of luck.:kungfu:

This is a much fairer assessment of some of the customers of these places. I think that it is very unkind to just label people as stupid because they have to resort to using these places. I mean, who are any of us to know what is going on in other people's lives? Eveyone isn't blessed with the same good fortune and circumstances. And good for them that they have received such blesssings. But most are not.Some people's everyday life is a struggle, and it has nothing to do with stupidity.

Say someone is just doing "ok", not good but no major problems either, but they don't have a high paying job or health benefits, and something happens to throw everything out of wack; like an accident or an illness or their job suddently "disappears" as another poster talked about on another thread and had to decide whether to move away from the hometown that they loved. And then all of a sudden they need money for medications or to get their car running or w/e. Maybe they don't have savings nor family or friends that they can turn to to help them out in desperate times. $hit happens to people and we should pray for them that someday everyone can share in the same joys and pleasures of life as God intended for all mankind.

[CarlE]

This is a much fairer assessment of some of the customers of these places. I think that it is very unkind to just label people as stupid because they have to resort to using these places. I mean, who are any of us to know what is going on in other people's lives? Eveyone isn't blessed with the same good fortune and circumstances. And good for them that they have received such blesssings. But most are not.Some people's everyday life is a struggle, and it has nothing to do with stupidity.

Say someone is just doing "ok", not good but no major problems either, but they don't have a high paying job or health benefits, and something happens to throw everything out of wack; like an accident or an illness or their job suddently "disappears" as another poster talked about on another thread and had to decide whether to move away from the hometown that they loved. And then all of a sudden they need money for medications or to get their car running or w/e. Maybe they don't have savings nor family or friends that they can turn to to help them out in desperate times. $hit happens to people and we should pray for them that someday everyone can share in the same joys and pleasures of life as God intended for all mankind.

I understand the extenuating circumstances but I STILL can't believe that these scam artists are the only option available. SURELY talking to financial institutions of some type and stating your case would be a much more viable alternative. I sure didn't want to sound condescending, it's just I HATE the people that actually do this and take advantage of people. 25% interest. How the hell do people sleep at night?

[werperry]

It isn't much different than getting an ARM loan and then the interest rate going to high for the people to pay. As one poster stated, the terms are clearly marked. Unfortunately, most people need the money NOW and don't take into consideration what they have to pay back. I've loaned people money for years at 25% and have never had one complaint and only one person stiff me. Which I received a judgment lien against him and will get my money plus interest whenever he sells or re-finances his home. The key is giving the people a payment that they can afford to make. The majority of people really do want to pay back the money, but if they get in over their head they look to another option and that just buries them even deeper. The idea of cashing checks is nothing new. Many bars did it for years in Massillon and other towns that had many factory jobs. The hope is, you cash the check for a fee then hope they buy a lot of beer.

here's what i don't get catholic. money is loaned for 25%...but, you hinted that going to 'another option' buries them deeper. what's that mean? are these places higher than 25%??

if so...isn't that usury? isn't ohio's usury limit 25%??

[werperry]

I sure didn't want to sound condescending, it's just I HATE the people that actually do this and take advantage of people. 25% interest. How the hell do people sleep at night?

here's a good story.

around the time i got married. my wife had a bank of america C.C. she's never been late, credit line of 10-grand, low balance and a rate of around 10-12%

during our transition (marriage)...I missed a payment by like 5 days. they jacked the rate up to 25%!! understanding the rules, i was going to wait 2 or 3 months...pay on time, then ask for the rate to be reduced. during that time...her credit limit went up to 15-grand?! so, figuring everything was OK... i called for the rate reduction.

no deal.

they said since there was a recent-late payment they couldn't offer me a rate reduction. i asked again why..."because of the late payment" was the answer. then i asked how someone qualifies for a credit limit increase. she said... "due to an individuals ability to pay, timeliness,..." etc.

my retort..."if THAT is the case...then WHY increase our credit limit?" after a couple of keystrokes... she came back stammering. no real answer. i then asked for her manager...while on hold...i was mysteriously disconnected.

needless to say we transferred that balance...and will never do business with Bank of America again. it's especially gratifying after hearing the recent news stories of BoA pandering to illegals.

[CarlE]

here's a good story.

around the time i got married. my wife had a bank of america C.C. she's never been late, credit line of 10-grand, low balance and a rate of around 10-12%

during our transition (marriage)...I missed a payment by like 5 days. they jacked the rate up to 25%!! understanding the rules, i was going to wait 2 or 3 months...pay on time, then ask for the rate to be reduced. during that time...her credit limit went up to 15-grand?! so, figuring everything was OK... i called for the rate reduction.

no deal.

they said since there was a recent-late payment they couldn't offer me a rate reduction. i asked again why..."because of the late payment" was the answer. then i asked how someone qualifies for a credit limit increase. she said... "due to an individuals ability to pay, timeliness,..." etc.

my retort..."if THAT is the case...then WHY increase our credit limit?" after a couple of keystrokes... she came back stammering. no real answer. i then asked for her manager...while on hold...i was mysteriously disconnected.

needless to say we transferred that balance...and will never do business with Bank of America again. it's especially gratifying after hearing the recent news stories of BoA pandering to illegals.

Unbelievable, well no not really. Knowing BofA it's VERY believable. I have a line of credit with them that they screw up continuously. The beauty of dealing with credit card companies these days is that just about every day an offer comes in for a 90-120 day 0% interest on balance transfers. So, if some idiotic nitwit tries to raise your rate on the phone or tells you they can't reduce it, you just throw the new offer in their face. I PROMISE you a supervisor will be on the phone in about 3.4 seconds reducing your rate. What a bunch of morons they have as customer service reps these days.

[austinsm11]

That's ok. BOA doesn't need your business. They are cornering the market on illegals. They are giving them picture ID cards down here to do their banking.

[CarlE]

That's ok. BOA doesn't need your business. They are cornering the market on illegals. They are giving them picture ID cards down here to do their banking.

That's right. I remember reading that. Good catch there austinsm11!!

[werperry]

The beauty of dealing with credit card companies these days is that just about every day an offer comes in for a 90-120 day 0% interest on balance transfers.

absolutely!

[Kamd50]

I understand the extenuating circumstances but I STILL can't believe that these scam artists are the only option available. SURELY talking to financial institutions of some type and stating your case would be a much more viable alternative. I sure didn't want to sound condescending, it's just I HATE the people that actually do this and take advantage of people. 25% interest. How the hell do people sleep at night?

I think that I know that you didn't mean it that way, Carl. As I have mentioned before on different topics, I just hate the fact that we (as a society) so easily tend to group people together under "labels". I know that there is much grief and strife out here in this world that many many people are facing these days as our society seems to become less and less compassionate.

As far as the "how do people sleep at night" question. It's easy, a large segment of our society are of the "me" generation. Without getting into it, just look at the value we place on our professional athletes and celebrities. Things have definately gone astray! And, at least imo, the teaching of such things as virtues and gratification gained from helping others is simply not taught or stressed in many many homes today.

[Submariner]

The question is who's responsibility is it?

IMO, the fees for those services are clearly marked. Those people know exactly what it will take it pay it back. If they then choose to take the loan, then they are responsible for repaying the money. The government can't make laws to help people manage their money better.

I agree MTown. There is a program started up by the University of Dayton and the Dayton Federal Credit Union to counter this problem, while educating people off the Payday/Cash Advances. It is low interest, and they can only borrow up to $250.00 to begin with. As they borrow more and repay, the amount can go higher gradually, but on so high, until they cap out. So the credit union monitors their repayment history. If they pay back the small loan amount and small interest, it is taken into consideration for the client later when or if they apply for a higher or larger loan. In the meantime, they are learning to better themselves and ween themselves off systems like Payday etc. At least someone is trying something. A Priest from UD started this and the Credit Unions so far love it!

[CarlE]

I agree MTown. There is a program started up by the University of Dayton and the Dayton Federal Credit Union to counter this problem, while educating people off the Payday/Cash Advances. It is low interest, and they can only borrow up to $250.00 to begin with. As they borrow more and repay, the amount can go higher gradually, but on so high, until they cap out. So the credit union monitors their repayment history. If they pay back the small loan amount and small interest, it is taken into consideration for the client later when or if they apply for a higher or larger loan. In the meantime, they are learning to better themselves and ween themselves off systems like Payday etc. At least someone is trying something. A Priest from UD started this and the Credit Unions so far love it!

BINGO. What a great start at educating those that get caught up in these financial binds. Congrats to the Priest who started this very worthwhile program.

[Submariner]

Hey CarlE and Guys.....

Also, they are trying to get all the credit unions around Ohio to do this and are willing to travel to forward this program on. So, if any of you belong to a Credit Union in Massillon, let them know of this, and ask them to talk to Day Air Credit Union and the University of Dayton and Dayton Federal Credit Union. They will be glad to forward their information, let alone send a rep. up to lecture on this issue. It also builds the credit unions membership up, because people are happy to be weened off the Cash-Advance Systems, they may remain loyal to the credit union that offered them hope in the first place!:ers:

I have sent that same info. to a credit union up here in Warren and they are studying it! We can only try........

[massillon catholic]

here's what i don't get catholic. money is loaned for 25%...but, you hinted that going to 'another option' buries them deeper. what's that mean? are these places higher than 25%??

if so...isn't that usury? isn't ohio's usury limit 25%??

Amortized over a year they can be 99.25%. I've seen them. Its unbelievable what they do.

[werperry]

Amortized over a year they can be 99.25%. I've seen them. Its unbelievable what they do.

Jesus. :doh: ...doesn't the state have a usury law? isn't the limit 25%?? how do they get away with that?

[massillon catholic]

Jesus. :doh: ...doesn't the state have a usury law? isn't the limit 25%?? how do they get away with that?


I believe that they found some type of loop-hole to get around it. I don't know if it is because they are very short-term loans or what, but they got around it somehow. And, its nothing more than preying on people who are down on their luck.