Companies refusing loans at mandated lower rate
Boy...you can't make a profit on 36%??? I'm sorry, but any lending industry that
can't operate on such terms, shouldn't exist. Why can't we legislate this
business out of existence??? Just because it's an easy option for people to do,
doesn't make it right or good to even have available. Maybe they should do debt
counseling instead. Oh wait, they only know how to keep people in a cycle of
debt. Not get out of it!!!
Spread the restrictions. 36% APR for a bounced check. Pennies for the bank. Same
with ATM fees. OOPS, there go checking accounts, businesses that accept checks,
ATM's. What?! They charge fees not an APR?! Take off your blinders and realize
short term loans charge fees like banks and ATM's and are VASTLY cheaper if they
prevent even one bounced check.McDonough School of Business at Georgetown
University found: Payday advance fees are lower than many of consumers
alternatives. Bank NSF and merchant fees on bounced checks typically cost more
than three times the cost of a $100 payday advance.Payday advance APRs are
often lower than customers alternatives, even on the same two-week term For
example, on a 30-day term, a standard $29 late fee on a $100 credit card payment
would have an APR of 771 percent. Similarly, a $100 check with a $25 NSF and a
$25 merchant fee would have an APR of 1,303 percent. The study is Payday Advance
in America: An Analysis of Customer Demand. Wall Street Journal found similar
results, so the the Federal Reserve Bank of New York. Get empirical data, don't
rely on anecdotal evidence fed to you by others.
Isn't loan sharking illegal? Just because they have a business license to lend
money doesn'e excuse them from loan sharking laws. All these loan sharks should
be put out of business because that is all they are. They prey on the poor and
low income people that can't afford them anyway and would use a bank if they
were able to. The collections department must be just as bad as the office and
business owners and use threats on their lives to collect. Why hasn't something
been done to investigate these businesses and make them abide by financeing and
These guys are a terrible part of our society. Payday Loans should be put out of
business. They entice the young and uneducated who don't understand the issue
with compound interest. I don't feel bad for them at all and think it will help
the young men and women of the Military. I am grateful for this law.
As a military reservist, I agree that the loss of access to these predatory
pay-day loans is a good thing. My concern is that traditional lenders may use
the same excuse these guys do that they can't make money when their loans are
federally capped at 6% APR during deployments and will stop lending to military
reservists. This may lead to difficulties in getting home mortagages, auto
loans, or credit cards for these military reservists.
Utah law only allows interest to be chsrged for 12 weeks, even though it must be
reported as an APR. Things aren't always what they seem.
The pay-day loan people are pretty reasonable when compared to the IRS abd State
Tax Commision. They are the real predators.
These things are all over Utah, I have seen more here that in my home state of
CA. Something needs to be done about them.
I'm not in any way saying that these places are good for society, but they
wouldn't be in business if there wasn't a market for them. Obviously they're
the best option for a lot of people. Maybe instead of trying to shut them down
we just make sure that people using the service understand exactly what it is
they're getting. Much like McDonald's; let them serve their burgers
the way the people want them, but make sure the public has access to information
letting them know the possible detrimental health effects of their choice.If people want a product or service, who are we to tell them they
shouldn't have it? Let's just make sure that they know what they're getting
A number of years ago I managed a financial institution where we were charging
36 % per year. The law provided that that rate, even though it was far to high,
that the law was set to take care of loaning money to high risk individuals. To
know that these financial institutions in question are charging up to 500+% is
really sick. And to now say that they are not willing to loan to servicemen for
36%, because they will lose money----------that is fully dishonest. They make
far too much money at 36%. I hope that the federal government and our state
will start to close out this dishonest form of lending money.
I have witnessed victims of these predatory loans. They usually borrow the money
at rates up to 600% APR for what they expect to be just 2 to 4 weeks. The loan
company then banks on the borrower not paying off the loan in the two to four
week period. Then the cash register rings for the loan company as these poor
victims are ground into dust by the 600%+ interest rate. My experience shows
that the victim does not really understand what they are getting into, or that
they are desperately in need of immediate cash. At the very least they do not
have the discipline to manage their finances wisely. These folks are definitely
preyed upon by these financial institutions. Our service men would be better
served by using their military related credit unions like NFCU.
Gauglione is right. While I agree that it seems immoral to charge the sort of
rates that are being charged, there is no deception involved. These businesses
provide exactly the service they promise. The rates are clearly publicized.
Everyone knows what the terms and conditions are. We need to let free
enterprise regulate the pay day loan business. If the consumers
would stop using these services, they would be forced to lower their rates, or
go out of business. But as long as customers walk in the door and sign the
dotted line, that is their choice. And as pointed out, these businesses do
provide an alternative to other financial penalties.Bob G: You need
to do some homework on what constitutes a loan shark. What seems as outrageous
rates, do not in and of themselves constitute being a loan shark.
"Oh, it's GOOD business" and it's cheaper than "one bounced check".People who need a loan "until payday" make a habit of it.....and then, how do
they pay off the moneychanger (payday loan shop)? By extending the loan?It's the financial equivalent of CRACK. Habit-forming, depressing,
"might as well go get more I'm in so deep already".These places ONLY
stay in business because people constantly roll over their debts. It was embarrassing to come home to utah, after months of being out of state,
and realize how pervasive these payday loan places are. Embarrassing. It
makes us look like we're ALL using them.
These effect many many people not just the poor. I know somone that makes about
70,000 a year and still juggles 2 or 3 payday loans these hurt and they are hard
to get out of they hold people bondage.
Gary, is it really "sick" that a company would charge $10 when someone borrows
$100 for a week? That's a 500% rate. We have to realize that these are meant
to be emergency, short-term loans. I do not really like these
lenders, and I've never used one, but I think most of them are legitimate
businesses with a legitimate service. The real root problems are
these: 1) an impoverished class making less and less (relative to the cost of
living) all the time; 2) a consumerist society where people feel entitled to buy
more "things," without responsible budgeting.
Bob is right about Banks though. Any Bank with all their fees, like overdraft,
bounced checks, Late Fes, etc, ALL CHARGE WAY MORE INTEREST THAN PAYDAY LENDERS.
Why do you think the Banks are part of the Lobbying effort to help Payday
Lenders stay in business. Banks are just as bad, but Payday Lenders take all
the heat. Banks disguise the interest rates they charge by calling it a "fee".
But if you do the math, they charge just as much or more interest than Payday
Lenders. Also all you who talk about 36% as high enough, don't
realize that these are super risky loans that demand a high return because a lot
of them go into default. So to make a profit they have to charge over 36%. If
everyone paid their loan back then 36% would be great! But those risky
borrowers who need these types of loans default at a high risk.
The U.S.Government should take an even firmer stand against these predatory
lenders. Include in the legislation the entire populace and rid our society of
this debt-incurring menace. The lawyer quoted in the article states; "Refusing
service to the the military does not violate laws because you can't force a
business to enter into a transaction that causes it to lose money." So how can
the American people be forced unwittingly into the same money losing
transactions? WE NEED TO WAKE UP! As tax payers can we continue to pick up the
tab for these crazy tansactions through our churches, and families, and
charitable organizations? We may never have been enticed personally into one of
these snake pits, but each one of us will eventually pay the piper for those few
who have made a desperate choice. We've already shouldered this financial burden
far too long through home foreclosures, repossessions, welfare abuse, and
increased criminal activity, just to name a few.
I see a lawyer feeding frenzy over this military exclusion. If we took better
care of our military than they wouldn't need a payday loan. This whole country
is built on credit. Just watch, Russia is taking over all the oil supplies,
China is getting in on it, all it's going to take is one match, one national
disaster and our whole country will go under financially. 80% of the country
doesn't have a liquid $1000 available to them.There is a bigger
problem here, I do hate that worm on tv, and the guy that says "got me some
cash" like yeah, you're the man, you just "borrowed" some money, how manly of
you.We are pretty well off, but it costs a fortune to feed and
clothe our family, and I even hit garage sales. Maybe I should go to Peru and
realize that one pair of pants is plenty though. We need to get rid of our
social expectations, that you can't wear the same outfit in the same week and
garbage like that. I guess in a world where we worship Paris Hilton, what can
I love to see people grouse about "predatory lending" and "price gouging" of
payday lenders who make a 36% profit.Yet I'm sure these same people
think nothing of making up to 100% profit on the sale of a house they bought
just a few years earlier.But that's okay, because they're good
people. Not like those icky loan sharks.
22 years in the military and never used a payday loan. If you need payday loans
then you need financial education, not access to 500% interest rates. I
remember when banks were going to charge to use a teller because they wanted you
to use the ATM so they could cut labor costs. Then they saw the gold mine of
charging a fee to withdraw your own money. banks are wealthy powerful
instituitions. Banks own these payday loan operations. Don't feel to sorry for
is a sign of our culture sell your mom if have to
Hey Cort Walker, you're a great american. While those in the military are
fighting to preserve YOUR freedoms you are helping to destroy their chance at
the "american dream". The Payday loan business is lousy, and I wish that no one
had to use it. But to refuse service to our military personnel is just WRONG.
Why don't you jack up the interest rate on everyone else by 5% and then maybe
you could "afford" to help out those miltary people who are defending the
country that allows you to jack them around. By the way, how much are you
really going to lose? It's not like Utah has a huge military presence like they
do in some states. Payday lenders should step up and help out our men and women
in uniform instead of turning away from them.... oh, but I forgot, we do live in
the state that supposedly espouses family values and love for one another. WOW,
way to prove that.... All for one and one for only my best interests.
What sad post. So now lending someone money at astronomical rates and flipping
a house for 100% are on the same level? Hardly. Those who are lending money
are doing it to people who are desperate and have no other alternative. Buying
a home and selling it for profit is a good investment. You aren't selling it to
someone desperate. They are paying market value for the good. 500% APY is not
market value. Don't lump the two together.And for those claiming that
bank fees are on the same level as the loan sharks, you are mistaken. I work at
a bank. Did you know that it is technically illegal to write a check when you
have no funds to cover it? Or to use your debit card when you don't have money
in your account? And I know that the bank I work at is willing to work with
people on bank fees in desperate situations. Loan sharks don't care. Plus,
banks offer overdraft protection accounts that have APY's around 17%. Most
people would agree that is a fair rate.
This subject has so many double-standards to it that it is laughable. Don't give
the loans to military to "protect" them? What about protecting everyone else?
Lenders refusing to give the military the loans because they "can't make money
off of them?" Now that is so sad! Cry me a river. These places should be out of
Hey everyone on this board! Why aren't you stepping up and offering loans at
36% APR? You all make wonderful armchair lenders. Each and everyone of you who
think these payday lenders should offer loans at 36% should offer these loans
yourselves at or less than this rate. Unless you are willing to lend your own
money to these soldiers you are nothing but hypocrites.
Wow! Way to support our military men and women! Wonder what they consider as a
good rate for THEIR OWN FREEDOM? Must not be worth 36%.
I do not think anything will be done to change this situatioin.Why?
I seem to remember that one high Republican official owns one of the biggest
payday loan companies in Salt Lake.Help me out I do not remember his
name or position.
For those defending these payday loans, just talk to a few people who have had
to use this "service". The Lender knows that the probability of the borrower
paying off the loan within the first 2 weeks is very, very low. They damn well
know that these people are in a bind. They lenders know this, but they use the
facade to entice these people in to borrowing. They use anactodal and
testimonial evidence on their commercials promoting this service. "Oh, how
great...I was only charged $4 for this service". How about interviewing the
thousands that have been completely screwed over by this. To those that say
that these loans are cheaper than overdraft fees and such, that is just if the
borrower pays off the loan in full within the 2 weeks.
People ought to be outraged by these loan sharks. It's time for the legislature
(State and Federal) to protect all citizens, not just those in the military, and
pass meaningful usury laws with a 21% cap on interest rates (still exorbitant
and plenty profitable).
Payday lenders are taking advantage ot those who cannot even afford to live
paycheck to paycheck! They should be run out of business. We all
need to make our opinions known to our political representatives that this needs
I applied for and got a $200 overdraft protection on my checking account at my
credit union. It didn't cost me anything! The APR is about 10% and I never
have a bounced check fee and if I'm a little short one month, I have $200 to use
without any loan approval or extra fees. On average most payday loans are about
$200. Wise up, people -- look for and use better sources that are out there and
we won't need to legislate paydays out of existence -- they'll dry up on their
wow! there are alot of nieve people out there
Usually even high risk people can get a $200 overdraft protection from their
credit union. And they don't have to pay it back in 2 weeks. They can make a
small ($25.00 approx.) monthly payment and pay it off over time. So it protects
their credit rating by not bouncing checks, paying bills on time, and paying off
a loan over time. Payday lenders are run by people looking to make MONEY, big
time MONEY, they are not a service organization looking to help a person out!
Walker said Utah payday lenders will now ask potential customers if they are
active members of the military. If they are, "we cannot offer them a loan.Oh really - sounds like "profiling" based on a lifestyle choice, that's
illegal - ask any gay!"you can't force a business to enter into a
transaction that causes it to lose money," Walker said.Oh really -
obviously Walker hasn't been to a hospital emergency room recently. Perhaps he
can't find one because illegal aliens have forced them out of business!
I was active duty for 6 years. In that time, I received base pay, free housing
(or comparable allowance) and free food (or comparable allowance). What do these
servicemembers do with their paychecks? I used to party hard, blow cash on music
and stereo equipment, and still had money left as an E-3.Perhaps
they have more kids than they can afford (a situation I made sure not to be in.)
The military is the only institution I know of that pays members more for having
dependents. At the end of the day, these reckless service members
are being victimized by legalized loan sharks. The only solution to this problem
as I see it is to teach these service members to live within their means and
pretend like payday loans are not an option...perhaps a lesson most Americans
need to learn.
At least we are one step closer to limiting these LOAN SHARKS. Back in the
early 1900's with the Mafia, their loan sharks would charge 150% and that was
sick then. Please don't tell me that there are people out there who think that
500% is ok!! It is wrong people. I have personally worked on behalf of
consumers in crisis, and I once worked with one person who had 10 Loans. I
tried to help her work out payment arrangements with these places like
Check-City, Dollar-Loan Center, Fast Cash, and every single one of them went
back on their word, screwed her over and took her to an attorney. They skipped
collections all together and took her right to court. These people are
absolutely ruthless and have no mercy. Do not side with them, support
legislation against them!! Take it from someone who has worked directly with
them many times before on the consumer's behalf. They are dragging down our
middle-income and lower-income classes and it has already started coming back to
bite the US economy. Open your eyes it affects all of us.
Those payday loan business owners aren't worthy of licking the bottoms of the
boots of the great soldiers of our country who are defending our country. These
so-called honest business owners are taking advantage of everyone with such
exorbitant loan fees and interest rates. The least they can do is follow federal
I would love for a company to become to the American public who would give 7-9%
personal loans to Americans all over the country like in the 70's. What a
relief and comfort it would be to the military and the poor and the needy! You
are punishing the men and women of our country who provide the very freedom you
enjoy while raping and pilaging the very people who need the service the most.
What has our political self tell us about us? We are the greediest nation in
the world, no wonder other nations hate us, we use our own people to get rich
off of. And the politicians, well, it's all a bunch of the same old stuff,
democrats promise to help and republicans alike are all the same. I pity this
nation, the needy and poor need us, but all the while we are fleecing the poorer
of the poor!!! Shame on all of us, we use to be a great nation, one with a
helping hand, now the hand can be found only in the pockets of our poor and
military who have choosen to protect all the idiots making the rules!!!
I would love for a company to become available to the American public who would
give 7-9% personal loans to Americans all over the country like in the 70's.
What a relief and comfort it would be to the military and the poor and the
needy! You are punishing the very men and women of our country who provide the
very freedom you enjoy while raping and pilaging the very people who need the
service the most. What has our political self tell us about us? We are the
greediest nation in the world, no wonder other nations hate us, we use our own
people to get rich off of. And the politicians, well, it's all a bunch of the
same old stuff, democrats promise to help and republicans alike are all the
same. I pity this nation, the needy and poor need us, but all the while we are
fleecing the poorer of the poor!!! Shame on all of us, we use to be a great
nation, one with a helping hand, now the hand can be found only in the pockets
of our poor and military who have choosen to protect all the idiots making the
Every member of the US military has access to free housing and meals, and a
paycheck substantially above the minimum wage. Any who are living hand to mouth
are high risk borrowers, plain and simple - and this is understandable since a
great many of them are spending their first months and years outside their
parents' household. I'm afraid this law is having the unintended - but
foreseeable - consequence of depriving them of a service which they would prefer
to be able to use.Education of every new enlisted person would be a
better alternative, more consistent with American ideals of free enterprise and
I want all of you to do me a favor on this message board, get out your pen &
paper or keyboard. Write your thoughts in a letter to our legislature. This is a
HUGE problem. Look around, as stated in one example, one person making 70K can't
stay a float. This effects everyone, since we are a whole as an economy, local
or national. Aren't we lucky to live in a country where free capitalism roams &
you can make a buck from those drowning in debt? These people don't care about
ethics or what is right. Laws have flaws, so let's make a difference people. Use
your time wisely contribute to society and please write to the following:James V. Hansen (District 1), James Matheson (District 2) or Chris Cannon
(District 3)Utah State House of RepresentativesW030 State Capitol
ComplexSalt Lake City, Utah 84114Telephone (801) 538-1029Fax (801) 538-1908
The Payday Lenders are a reflection of our society. Unfortunately, many people
in our society do not understand the basic principles of wealth. For example,
many do not understand the difference between income and wealth or the
difference between needs and wants. This lack of understanding causes problems
for many people. In order for a society to be wealthy, its citizens
must learn how to be wealthy.
How and why are we not calling our government officials to cause an
investigation on why it is alright to profile our military men and women. You
say these people need an education on fiscal responsibility? For what, being too
poor to buy food or pay rent (not living on base). Why does every one profess to
care about their neighbors and then talk crap on them when they are in need?
Where is Christ in all this? Why haven't the good people of this Nation and the
State of Utah rallied around to put these thieves out of business? This is not
a good situation where we as Christ like people stand around and do nothing but
write on a message board. If you are in disgust, call or write a member of the
local legislature or other official to make some change on behalf of these
families, all families. Remember the rule, the one with the most gold makes the
rules... how sad that our officials turn their backs on the very people who have
elected them, you would think they would listen and do politics our way...
It is immoral and embarrasing the way less thoughtful people are jumping the gun
here and trying to argue two completely incongrous arguments in an effort to
paint the Payday lenders as the bad guys.Either the Payday lenders
are simply a necessary financial tool for the poor since our banks and credit
unions are so rapaciously unserving of a family fallen on hard times *or* they
are luxury quick loan that should never be used by our armed forces that we
admitedly do such a poor job of supporting as a nation and they should be
*commended* for protecting our soldier's families from a service they can't
afford.If they *should* offer services to military then you seem to
be arguing it's not an overprofitable racket, but if they *shouldn't* then why
wouldn't you commend them?You can't have it both ways, lol.
Concerned for the Military:It does disgust me that people are
borrowing money from payday lenders. The best way to avoid payday loans is with
knowledge. People should try to become financially educated. Parents should
teach their children how credit works, how to prepare a budget, how to save for
a rainy day, and how to invest. High schools should offer a math course that
focuses on the basics of personal finance.We live in a capitalist
society - if you want to be a good citizen in this society, then become
financially literate.I'm also concerned about the military. My
father is retired army and my brother is preparing to leave for a tour in Iraq.
I grew up around the military. Based on my 18 years of observation gained from
growing up in military communities, I can say that many members of the military
would benefit from financial education.
All consumers need usuary laws. While I appreciate the fact that military
personel need protection...So do consumers in general. When credit cards
companies can charge around 30% interest...It's radiculous. Caps should be
placed on all fees. People don't always bounce checks on purpose, and it doesn't
take many insuffient funds fees @ $ 18.00 a whack to put you on a downward
spiral that's hard to get out of. While increased risk should require a higher
rate, and if you bounce a check, there should be a fee(A limit as to how many
they can impose in a given time frame shouldn't be asking too much.)...There's
no excuse for charging more than 18% interest.
Your doing them a favor, payday loans are A SCAM!
The solution is simple. Since payday lenders claim they can't survive on 36%
interest rate, we should encourage the legislature to make that (or a lower)
rate required for all borrowers, not just the military. Then we might be free of
this scourge of usurers.
Perhaps the military should hold financial courses for its troops? Obviously,
anyone using payday lenders does not know how to manage their money.
What makes you think that James V. Hansen is still in Congress representing the
1st District in Utah? Check your facts (and current list of Congressmen) out
before posting. It'll increase your apparent intelligence quotient considerably.
Please don't use Wikipedia as a "reliable" source. It's like reading grafitti on
bathroom stalls as far as an accurate source of information.
Why blames the business person, at least he is clear on what he charges. Either
educate the fools that use these companies or/ oh yes ....I forgot .... it
speaks to the kind of people recruited into the military!!!
Hey, here is an idea. All you high minded people that think these payday loan
places should be out of business need to get together and open up your own
payday loan store. Set your rate at say 25% interest. Your competition will
drive the 500% dudes out of business. And think of the moral service you will
be doing for your cusotmers.What, you say it more funto whine about
the other guy and demand that the government do something about this "great
travesty" than do anything yourself. Oh, you say that when you really do the
numbers, you wouldn't make any money considering the cost of initiating loans
that last only 1 or 2 weeks, to high-risk applicants?Here is another
solution. Each of you can start offering financial counseling to the military.
That is another way of driving them out of business.
What's hilarious is that the same government that condemns the "predatory
lending" of payday lenders, out-loansharks the worst of them when it comes to
interest and penalties on unpaid taxes.There should be a
Constitutional amendment that requires the government to abide by every single
law it imposes on the rest of us.
members of the military who use payday loans need to be told no -- as do anyone
else who uses them. Really, the rates they charge are so usurious that the only
way anyone needs their service is if they have so badly botched their personal
finances that no other option is open, and this is not an option so much as it
is a bear trap.Sadly, they are a reflection of the American mania of
the last several generations to always want what we want when we want it --
delayed gratification is a mystery to most people. Anyone can save what these
places loan, typically several hundred dollars, that is enough to handle any
small emergency without paying these sort of interest rates.
actually, BH, some high minded people who think these placse should be out of
business have done exactly that -- it's called Utah Saves, and it shows people
how to save an emergency fund to get past the emergencies that send them to
payday loan shops. They don't charge any interest, the service is free, and
people learn to live independently.
Ogden, Utah:That's Great! Now that's what I'm talking about! People of action that feel they can make a difference and do what they can,
instead of sitting back and complaining about the injustices in the nation, and
expecting the government to further legislate and control our lives, in order to
protect us from ourselves.
I think it is time that our legislature says "NO" to pay-day loan business.
Rates that high (36% or 536%) are usury pure and simple. They prey on the
segment of the population that are the most needy and can least afford it. They
are predatory. I say we ban them entirely in our state or limit their rates to
something more sane like we do credit card companies.
George--It speaks to the kind of people recruited into the military? Patriotic
young kids living away from home for the first time? I hope you see this post.
You are not fit shine the boots of our young military members. very few use
these services but they are aggressively marketed to them. maybe they should
follow Utahn's example and declare bankruptcy? Of course the military will
punish them for that. And for bouncing checks. Did you ever think they use
these services to avoid the consequences of financial irresponsibilty that their
non military peers routinely get themselves into?
i love all these 'educated' people talking about how payday loans make a
killing. the real killing is running a bank. you got a society of people who
think they are high-class [because they don't have to go to a payday loan
place] but all these people are still living paycheck to paycheck more or
less. and then if you just process their withdrawals before their deposits,
bingo. 39 bucks a pop.
I don't like these guys. But, like bars and tabacco stores, they exist here and
are frequented by consumers. We have our free agency. We can budget better -
perhaps doing without that trip to McDonalds, or do (gasp!!) without Cable or
Satalite TV. Some might even be happy without cell phones. and doing without a
credit card could happen. But, because folks have not learned to live within
their means they rely on borrowing from Peter to pay Paul. If the military
can't borrow , it's because a company has made the business decision not to
lend. Maybe instead of getting mad at the pay day loan industry, we get mad at
irresponsible people who have not learned how to balance the checkbook and live
within their means.
Guns don't kill people, the government does.
As a person who has worked for an online payday loan company, might I add one
note. For our company, the average customer made between $30K and $60K a year.
These aren't exactly poor or needy people. These are people who simply have
never been taught to SAVE. Its the same for anyone, military or not. Whatever
you are earning, a piece needs to be put aside for a "rainy" day. I'm a poor
college student and its a simple lesson. Don't be fooled. The payday loan
industry thrives for one reason, people are not being taught to save for hard
times. Teach your kids this lesson, then the payday loan industry will
Before the mid 70s we had usury laws against this sort of thing. It was also
called "loan sharking," and the debtors had the fear of broken fingers to help
them pay up. The military is in a similar situation. These loan sharks threaten
to inform their command if they don't pay up, along with garnishment of wages, a
much heavier hammer than the civilian population. Why do you suppose that there
are so many of them just outside of the military gate? Unpaid debt can be a
serious career breaker, and makes the service member ineligible for a security
clearance or overseas deployment.
Deeper issue to this problem is unfulling materialism of the majority of
Payday lenders are a cancer in Utah. They prey on the poor and uneducated and
deprive them of what little money they have. As one of the largest contributors
to statewide political campaigns they also have been able to thwart legislation
that would impose even minimal limits on their loan rates. Because our state
legislature has done absolutely nothing to stop them from exploiting our
military service members, the federal government had to step in. I'm glad that
they did. Maybe we'll see some close shop now around Hill.
Soon these loan sharks will see a new law requiring them to offer their services
to the military. It's just a short time, the loan sharks will get their
come-uppance on this issue. Many can play this game, and we the people, thru
our lawmakers, can call the loan sharks to task. 36% is still pretty darn high
for a paycheck that's usually no risk for the loan company.
What ever happened to personal responsibility. Why do we have to have the
government step in and pass a law to protect our own stupidity? But
if we are going to pass a law what about credit card companies who charge
$249.00 in annual fees on a credit card with a $300.00 limit? What would the
annual APR on that be? What about banks that make more in "fees" than they do
in actual interest? While we are at it, why not pass a law that
gives all our money to the government and let them tell us what to buy, where we
live, what job we have, etc. so that we don't ever have to worry bout
'preditory' lenders, banks or credit companies again.Education (and
personal application of that knowledge) regarding financial and personal
responsibility is the on only answer to this problem.
Be realistic. The people using these types of businesses, military or civilian,
aren't going to apply the lessons learned in any financial classes until they
hit rock bottom, but by then their finances and credit have already gone down
the tube.For example, in the military there are four necessities:
girls, beer, cars and internet (not listed in particular order) PFC Joe Snuffy
is not going to pay attention to any financial education classes, even if he is
required to attend them and policed to stay awake during the class...Also, since
while he's deployed the only one of these necessities he can have is internet,
he'll find some way to blow his money, like purchasing weight suppliments,
energy drinks, plasma TVs, play stations, and computers before he gets home.
Therefore, when he gets home and blows the rest of his money on a brand new car
he can't afford, he'll use whatever means necessary to get a loan to acquire his
other necessities. This is one of those things that the only
solution is regulation...I'm sure most disagree with that statement, but it's
true. Joe isn't going to blow his money on something if he isn't allowed to do
These "lenders" do not make enough money off the others they lend to, that they
cant drop their rates for people serving their country? I hope they all get run
out of business then by the government
Fredd:While I would agree bias' are showing, I do not believe that just
because someone is in the military - that they are patriotic. Usually it is
because of economic condition - not patriotism. ( particularly - in case of
those that use these services). As for shining boots ----- does it
Ignorance is bliss on this thread. How many of you would be upset if 1 in 4 or
2 in 5 of the products you purchased were defective and you had no means of
replacing the product because the company was no longer around? That is the
default rate on these types of loans. How many of you want to lend your money
to people knowing that 1 in 4 or 2 in 5 people will never repay because they
simply never intended to?$15 per $100 loaned allows these companies
to survive if they can keep the default rate below the ratios mentioned above.
You cannot compare these rates to auto or home loans. Those loans are
collateralized which means the lending institution has a means of recovering
should the borrower default. The payday lenders do not have collateral on their
loans and if a borrower wants to they can become invisible.The
amount of work required to collect on these defaults far exceeds any of the fees
that are charged. The lenders only make money if the customer makes their
payments as agreed. The problem in this industry is the users themselves lack
We CANNOT stay in business and charge 36% APR. At that rate we would only
generate $1.38 for a $100 loan. You tell me what financial services company can
stay in business and only make $1.38 on a loan. That wouldn't even pay the
teller their wages to say "Hello". And Utah state law prohibits payday loan
companies from charging interest past 12 weeks. Common sense... the shorter the
term on a loan the higher the APR has to be to even break even!!
Lender,Since it appears that you are in the business, now is your
chance to defend yourself. Take out your calculator, do an imaginary loan for
$500 with your current interest rate. If you have the guts to post on here what
the balance will be after 12 weeks, and you can honestly say that you aren't
taking advantage of someone who you know will NOT repay the loan on their next
Lender, under what terms of the loan would you only make 1.38? Under those same
terms, how much do you make with your current interest rate? Lastly, can you
stay in business with that amount or do you rely on default to make your money?
It amazes me that an article can be printed that so mis represents the facts.
If you had done your research you would know that the DOD act not only limits
the APR to 36% but it also expressly forbids any loans that are secured by a
check or auto title. Payday lenders didn't CHOOSE not to do these loans. It is
against the law for them to lend to the military now.
What about the whole income to dept ratio that if you're in the military and
your dept is more then your income you DON'T have to go to war??? I've heard
that's what a lot of military were doing do keep from going. But we can't say
that, no that's bad press...
I guess our fellow Americans are just too stupid to read and understand plainly
posted fees notices at a payday lender store. I'm sure that it might be worth
15.00 to borrow 100 to get your car fixed, and save your job-but why give them
that option? It's not like we live in a free country or anything like that. While we're at it, it looks like we have a bunch of dumb people taking out
mortgages-let's stop that too-we have to protect these fools from themselves
after all. I guess the best option really is putting the arm on one's
parents and friends. Thanks to all who want to take options away from the
American people. You are so wise.
I think that the members of the military will just use pawn shops more....Then
they can pay even more interest . Our congressmen are so smart.
What happened to personal responcibility in this country? Everyday
we keep trying to regulate every aspect of the lives of the "uneducated ignorant
masses" for their own protection.Lets think for those who are too
stupid to think for themselvesSurely all the critics who have spoken
in the forum and labeled this industy "loan sharks" would have never been
foolish enough to use these services.So why are they so upset? Are they confused that APR stands for ANNUAL PERCENTAGE RATE and that
payday loans are not annual loans so APR is really non applicable? Did someone force them into one of these stores and demand thay take money?
Or just maybe did they do so because it was the easy thing to do.
Did they trick themselves into beliveing that the funds that they just borrowed
would just materialize when time to repay? Its always easier to
rationalize away responsibility then to accept it.
"Walker said, "This law will force the members of the military to choose between
MORE EXPENSIVE alternatives....."That paragraph says it all -- caps
highlight the point... Just what do you think KEEPS payday lenders in
business? A recent Deseret News article pointed out that THOSE fees approach
2000% APR -- when one considers that cost, 521% APR starts to look pretty good.
When a bank charges as much as $39 per return check and a daily or hourly fee
for each period of time the check is not paid, post-dated and payday loans
become a "cheaper" alternative.
Here Here Roobah. What's the APR when our fine upstanding Banks in this country
charge $25 - $35 on a $10 overdraft item on a 1 day period. Tell me the
militray credit unions are going to stop charging those fees to our bravest.People don't have any clue how much this law is going to HURT the
military instead of helping it. This law has taken the freedon of choice away
from our county's finest, and because of the fact that we underpay these folks,
they folks have little or now chance to short term financing to help them out in
times of need.Maybe if our legislators really cared about our
military, they would pay them more then the poverty line in this country so that
they wouldn't need payday loans. Instead of trying to judge them maybe they
should try to impower them.
I think that it is a good idea to give members of the military special discounts
on loans but not at the expense of the loan company. They should get somewhat
of a discount, while allowing the loan companies to stay in business. Althought
I do agree that 36% is still a lot on a loan and that they should be able to
make money on that. On the other hand I see the position that the government is
trying to but the vets in. The vets should exhaust every other possibility of
getting help through vet programs, relief programs with their church, military
relief groups, family or others for help before taking out a loan. I am not
saying that they should automatically go looking for handouts but they shouldnt
get themselves in deeper and deeper debt before getting help from these special
I really think it is unfair that they (gov) has banned this because.. being a
single father of 4 young children with a mortgage, high utility bills, car
repairs/upkeep, children's needs, etc., there comes times that things pop up out
of the blue and my family runs short for food for the kids. Now my kids get to
suffer because I don't qualify for welfare, can't get a quick loan, and the
local agencies laugh at you when you ask for help. Even the military relief..
say oh can't help! So thanks gov. for letting my kids suffer once again! Yes
some people get addicted and over the heads in debt but that is their fault!
Life happens and they must learn from their own mistakes but now children go
without nice meals instead!
wow utah is lost.I stumbled on this blog and its kinda funny.People think that
payday lending is a problem.You can take away the service but you wont take away
the need.internet pdls are 3xas much as these store front state regulated
lenders the need doesnt go away!The need is there because of the demand. I HATE
my credit cards to but I dont want them banned.Just because people dont have
good credit doesnt mean they dont need money. Use your own mind and dont let the
so called do gooders make your decisions for you.Giving banks a non compete in
Utah is a bad idea banks are raising there credit standard and turning there
backs on this part of society. Giving banks all the lending power is a stupid
idea research how banning pdls in Maryland has really hurt the middle class as
much as the lower middle.Banks pushed for this and continue in other states.If
you want to point the finger at the problem you might need to look in the
mirror.own up its hard to do but its the honest way