Comments about ‘Data show short-term lending not predatory’

Wow. This BYU assistant professor actually brings up some really good points. I am enlightened on the subject.

People who understand interest earn it while those who don't pay it. If people don't have enough money to put food on their table how can they possible afford to repay borrowed money at an interest rate as high as 500%?

It's all a matter of choice. The people who choose to get these types of loans are, by Utah law, adults. They should be free to decide if these loans will benefit them or not. Obviously, many people do decide that these business provide meaningful services, otherwise they would not get loans from them.

Re: Bryan | 10:15 a.m. Dec. 20, 2011
"It's all a matter of choice"

Borrowing money at rates of up to 500% is a matter of choice. So is smoking. What both have in common is that they are each classic examples of lack of good judgement. People who don't have $20 for food today certainly can't afford to pay back $30 back tomorrow.

When Dr. Evans refers to an APR above 500% on a payday loan, certainly he is referring to an unusual loan of above 19.18% (as $19.18 on $100) for 14 days, for which the Truth in Lending Act, TILA, of 1968 in Appendix J(b)(1) states the Nominal APR (NAPR) is calculation by multiplying the rate for a period by the number of periods in a year [19.18%*365/14= 500.050%]. The mathematically-true APR (which is used in England) is calculated by compounding the rate for a period for the number of periods in a year (CAPR) calculated as ((((19.18/100)+1)^(365/14))-1)*100 which is 9,699.090%. Websters dictionary and Blacks Law dictionary, each define NOMINAL as not real of actual. The Nominal method was recommended as the true method in 1967 by Joseph Barr (Under Secretary of the Treasury). TILA allows a tolerance of accuracy in expressing the APR of one eighth of one percent (0.125%). The CAPR is 73,592 of those tolerances from the NAPR, calculated as (9,699.090%-500.050%)/0.125%. TILA should be changed to use the CAPR.

Campaigning against the shock-value of %500 interest rates is far too tempting for most politicians to stop and fact-check such an exaggerated approximation. While banning these loans may only [adversely] affect a tiny fraction of constituents, the political cachet of being tough on predatory lending appeals to many, however vacuous the act is.

Excuse me? Any interest rate above 30% is offensive???? Like, what? Such an idea is unreasonable? Gad! when I was a kid--and there were regulations--you couldn't charge 20%; it was "usary". What interest do any of you EARN on your savings (I get 2 TENTHS of 1 percent)? Most real companies are delighted with 5%--groceries stores typically earn less. But we are not supposed to be offended becuase "it's the choice of the customer"? Hogwash. Why do the rich borrow money at a fraction of a "mere" 10%, while the poorer people pay 20% or better? Becuase they are better risks? If a person pays you $100 on a $300 debt and you call $50 of it interest so they still owe you $250, is it any wonder they fail so often to be able to repay the loan? But that's okay because it was "their choice". Do any of you with that monstrous, abominable attitude know what it is like to live from paycheck to paycheck? God Save Us from the greedy people that own and operate this country--and ALL the apologias offered by people like this author. Pfui. Makes me want to vomit.

Forgive me: I have to add more. These previous comments so reek of sanctimony, sitting here, listening to Christmas Music, I can't help but think further of this subject. "Their Choice" All the comments so far have boiled down to that. "Their Choice". I have a dear friend who is now, in his 60s, experiencing health problems because he could never give up smoking. But, hey! why should I sympathize? Smoking was "His Choice". Our Savior, once healed a man whose disabilities, we are told, were caused by "His Choice". Yet our Savior said "Son, thy sins be forgiven thee", and then healed the man. Why bother? His problems where "His Choice". Well, I can testify that in my life, 80% of my problems were the result of "MY CHOICE". I admit it. In my lengthening life, I have been stupid. Unwise. Ill advised. Reckless. Profligate. Anybody want to add a derogative? I have been ALL of them. Problem is, I learn slowly. Nowdays, in my older age, I can save money (not much--and Wow! what I earn at .2%--but at least I am not in debt). But that is only because of the maturity of years. In my youth, I had all the problems of those you commentators--and this author--seem to stand above and look down upon. Can none of you find pity for those less "wise", less "worthy" than yourselves? Christ defended the weak; but apparently not of you commentators feel those PREYED upon (Yes, I use that term) by the greedy feel that need. I leave your feelings to yourselves. Myself: yes, I DO feel the need for government to defend the weak: nowadays it only defends the rich.

If you have to borrow money to feed your family, then you are either not using your resources wisely or you are not on some welfare program(s).

It's a choice. just like when you buy a home and choose a loan. The bank or lender cannot force you to sign any paper. All of the responsibility goes to the buyer. Ask questions, look at the bottom line, find out exactly what you're paying each month, find out how much interest your paying each month, look at your expenses and revenue, figure out if you can actually afford it. It's not what you want, it's what you can afford.

It's your fault if you buy a home you cannot afford. However, I wouldn't want my money in a bank that gives money, knowing that a family cannot afford to pay it. That's just a chance that my money will be lost in that investment. Something I wouldn't appreciate from a bank or credit union. I would rather see them deny people or tell them they can borrow less.

Then again when the federal government tells banks to lend and gives them a sweet offer to do so....

Dr. Evans, don't you think it would be fair for you to caveat this article by letting the readers know that you received a grant in the amount of $22,770 by the Consumer Credit Research Foundation? It may also be interesting to know that the CCRF is a non-profit research foundation that is funded by the payday loan industry whose founding officer, Hilary Miller, is the lawyer of Dollar Financial Group and the president of the Payday Loan Bar Association. Not exactly an unbiased piece.