Comments about ‘Limit payday lenders’

Yes anyone would agree that 500% interest is excessive.
What I don't understand is why doesn't someone start a loan business
At 100% max interest and put all these 500% places out of business.

I think that Payday Lenders should be shut down entirely. They charge a high interest for a very short term loan. People go in once, go again and pretty soon they are living a month behind +plus the interest.

I can see it for the military Deploying Fast but the Armed Services should take care of their own.

In Hawaii they are all over the place and the Military are their favorite and most frequent Customers.

I have No Use for them what so ever. I would shut hem all down in the same sweep that the Abortion Clinics would be shut down.

Some of that borrowed money is used for that purpose by the way. Also to by Booze, Drugs, Hookers, and Party.

Low Ranking Enlisted Persons and the Poor and Uneducated are the biggest victims. The thought is that they will catch up next Payday but they never do.

They payback a loan and then take out another Loan. Strict controls and strict controls on Interest it should never be more then 10%. Plus No One Under 21 should be allowed to borrow the money.

Nothing Brings about responsibility more then doing without.

Although I agree with the tone of this editorial, it makes one assertion that makes no sense. If you are going to allow these exploitive bottom dwellers, known as "payday lenders", don't limit their numbers. At least apply "free market" principles and let them slug it out with each other. (Maybe the competition will drive the rates down to 450%/year! )

Contact your legislators and ask them to support this bill. Here is a copy of my correspondence:

Senator Bramble,

I'm contacting you to express my support for HB111 and desire for you to support this bill as well. Payday lending, although helpful in limited circumstances, is an industry that enriches itself at the expense of the poor and financially uneducated. A 100% annual interest rate cap is in my opinion a reasonable rate which would allow this industry to continue to profit while at the same time limiting their ability to exploit the vulnerabilities of the poor and less educated.

Once again we try to legislate something that society does not like. Why can't we let free enterprise take it's course? Payday loans is a fairly young industry. Given time, competitive prices will drive some places out of business.

Meantime, we need to be realistic about the value of payday loan businesses to some. Many times I have heard people tell me that paying the interest rates of a payday loan is cheaper than paying the returned check fees charged by a bank.

If we really think that payday loan interest rates are unfair, then similar legislation should limit the rates banks charge for returned checks.

Is it "free enterprise" to loan money to a 12yr old at 500%?

These payday lenders are taking advantage of people who are not smarter than a fifth grader.

I have no problem if the people signing for the loan can calculate the payments on a piece of paper. We need to protect vulnerable people in our society, while allowing free enterprise.

Yes, these places are engaged in Free Enterprise. And Free Enterprise is certainly noble.

But what is not noble is that they target and exploit the poor.

You are right, market forces can decide prices.

I have never been to one of these places, and never will. Knock on wood.

But who does go? The poor.

That is why we need to limit these places.

If you can't understand why payday lenders charge 500% APR, then you aren't any smarter than 5th graders either! Do you know what that "A" stands for? ANNUAL! Now, if you charge 500% ANNUALLY, then how much are you charging daily? 1.37% actually. Now, the average loan is two weeks, or 14 days. What is 14 times 1.37? 19.18%, which is pretty reasonable.

So if you borrow $300, which is the average loan, for two weeks, you can count on paying back the loan at $357.54. Where are these outrageous rates you speak of? The idea is that its is a payday advance, or getting your paycheck early. You pay money in order to receive it early. If your paycheck is $400, then don't borrow more than $300.

It is not the job of government to protect people from making poor decisions. In order to guarantee our freedom to suceed, we must have the freedom to fail.

And by the way, the median income of payday borrowers in Utah is $35,000. And a vast majority of payday borrowers are responsible individuals. Facts are stubborn things.

Immoral, I believe describes them to a T. Is child porn Free enterprise BH?

Again, and again, we find that there can be no true sustainable free enterprise system without the checks and balances of moral law. The entire system is on the verge of collapse due to violations of moral law in so many different areas that we would go bankrupt just paying for the man power needed to investigate and track all these scoundrels down.

The DN is right on this time with the exception of supporting a bill that limits interest to 100 %. ??????? 100 % is still immoral.

Clearly the solution to this immoral business climate is for moral people to step forward like Muhammad Yunus did in Bangladesh and create a bank that operated contrary to the traditional banks, such as lending to the poor at low interests rates without collateral. And yes, it is self sustaining.

Wouldn't it be interesting to see this type of system implemented that eventually bankrupted these guys, and then watch them get in line at the institution that put them out of business themselves only to be turned down because they didn't have enough moral character to qualify?

Chance and 8:56 a.m.:

It seems so presumptious to assume that all those who use payday loan businesses are simple minded and poor. It sure makes it easier to assume that everyone else has a moral responsibility to protect people of such low intelligence and financial means from themselves.

Since payday loan businesses are heavily concentrated around our great nation's military installations, if we follow your logic that means that the nation's sophisticated weapons systems are in the good hands of moronic poor people. I don't think any of us believe that. The point is, it is a false myth that people that use payday loan businesses are all poor and of very low intelligence.

Many just make bad financial decisions. And paying a $20 fee for a $200 loan to make it till payday, is a much better financial choice than $100 - $200 in overdraft charges from the bank.

The payday lending companies DO NOT go after the poor! You have to have the means to obtain a loan. If you do not have income then you will not recieve a loan. No body forces anyone to go to a payday lender. I have used the companies for years and they are great! No to mention how many jobs these companies provide. It is not the goverments job to control how I spend my money. I work hard for it I can go and loan where I want, that is what America is all about!

When Capitalism fails to work properly in our society, why not try socialism.

In the same vein as the state owned liquor stores have the state create Check Cashing and Payday loan stores that would handle the need in a more social acceptable manner. Since the state already has access to the Income Tax refunds, they have a ready made way to encourage people to pay back the loan.

In this way the taxpayer would be saved a great deal of money that is now wasted in the courts where the criminal lenders take their victims who cannot pay.

When Payday Lenders prey upon the people of our society they injure the whole populace by increasing the number of desperate, disgusted and discouraged citizens.

Citizens who otherwise would be productive members of society that are then relegated to crime and vengeance against us.

There would be lots of stores, shops, and even banks that might donate space to have such a draw into their place of business

If payday loan companies have to disclose APR, why don't banks and credit unions have to disclose an APR for bounced check fees and atm fees? Would people get so upset at payday loan stores if they advertised (get $100 for 2 weeks and pay $16) wonder what the APR would be for a bounced check fee on $100?

How does Laura Black know anything about short-term interest rates and what is and isn't viable? Why 100%? Why not 123%? Why not 2%? Where do these numbers even come from? Are we all for 100% just because it's a nice even number and a multiple of 10? This is ridiculous. Talk about unintended consequences.

Government needs to get out of the business of business and stop assuming that every citizen is a first grader that needs coddling.

Do the people who support this bill also sit around wondering why so many companies spend so much money on elections and lobbying? When government can decide on a whim how you should run your business, it makes sense to spend money to influence politicians.

Do people really understand how payday loans work? First of all, the person who wants money in the first place is the one to go get the loan. Nobody is forcing them to get it! It is their responsibility. Plus if you go with someone like Check City, you aren't going to have such a high interest anyway. Not to mention, they will work with you to make sure you will be able to pay off your loan. Maybe people are just going to the wrong place for these things. Anyway, payday loans need to be used responsibly - end of story.

I think it's ridiculous to say that, "payday lenders are taking advantage of people who are not smarter than a fifth grader". Nice line Chance Williams. I don't know how you think insulting people is going to help your cause. Payday loans are a financial service that is available to those people who UNDERSTAND what their situation is and need help from a responsible lender. People are smart.

There are all types of financial services. It's up to each individual to decide which is best for them. It's not up to the government to cut one out simply because, in some situations, it may not be the best option for someone.

re: Confused
APR is annual percentage rate. Most banks and credit unions assess a flat fee for bounced checks and such. Not based on interest.

Payday lenders are horrid, but they profit off of desperation and lack of awareness or discipline. I cant count the number of times I've seen people pay $15,$20 or more dollars in interest or fees because they NEEDED the money to get a $2 dollar meal at McDonalds or a cup of coffee or smokes.

If you are driving 90 miles per hour and are stopped by a police officer for speeding, would you argue that you've only been driving for ten minutes so couldn't be driving 90 mph? This is the same ludicrous argument made by people who try to extrapolate a daily or weekly rate. The cost of a loan is expressed as an annual term to allow comparision; your mortgage rate might be six percent on $100,000 but because you have the use of the loan for 30 years, your interest will be much more than $6000 over the term of the loan. An APR allows people to understand the RATE at which interest is accumlumated regardless of the loan term. Comparison to a bounced check fee makes no sense, as a fee is not interest for the use of money. And even after the initial interest on a two-week payday loan, the PRINCIPAL is still due in full, yet for most cannot be repaid until the loan term is repeatedly extended. Yet these arguments are what keep these loan sharks in business.

Jason | 6:58 a.m.

What makes YOU qualified to decide what a "reasonable rate" would be for these businesses?

Do you write to your bank frequently and tell THEM what you think their rates should be and demand that your legislators pass laws mandating that the rates be what YOU consider "Reasonable"?

Unless you're in this business you probably need to leave it up the the people that ARE in this business to decide what is "reasonable". How would you like people who don't understand YOUR business writing to their legislators and asking them to put regulations on YOUR business that would make your business un-profitable and therefore your job GONE!

There are reasons these rates are what they are:
1. There is a very high default rate.
2. There is NO Collateral.
So if they default it is a total loss. All they have is your promise to pay. It's not like a bank where if you don't pay your house payment, they get to keep your house, or you don't make your car payment, they get to keep your car.
3. They_are_for_short_term_emergencies_only. Not_intended_for_monthly_expenses. Intended_to_be_payed_off_in_days_not_months_and_NOT_to_be_rolled_over(Thats_a_personal_mgt_issue).
4. Try_writing_your_legislators_and_insist_they_require_normal_banks_to_service_loans_to_people. Who_have_a_bad_credit_history_a_bank_won't_touch.

Are we ready to ban the "immoral" act of bounced check fees and overdraft protection charges of banks like Zions and credit unions like Deseret First???? Because the APR associated with those products are about 750 to 2000% APR.

If the cost of credit is the major issue with payday loan then why not ban any product that charges in excess of the 100% APR rate cap proposed by Rep. Laura Black? Or is it socially acceptable to allow banks and credit unions to charge high interst cloaked in terms like "overdraft protection."

If we are serious about this issue then it needs to be applied across the board. Until then I'll ignore the call for singling our an industry for being honest about what they charge.