Comments about ‘Payday lenders tells military 'no'’

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 disappear.

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 country's population.

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 so

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 matter???????????

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 financial discipline.

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 payday.

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 themselves

Surely 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.