Payday loans are good

Payday Loans are Good

Filed under Payday Loans, Politics

Nov 24

I still do not understand the mindless mobs behind the movement to ban payday loans. What is the rationale here? Do we ban alcohol or tobacco because they harm the human body? Do we ban guns because of their potential to injure someone? Do we ban casinos and gambling even though millions of people lose billions of dollars there annually? Yet activists are so quick to try and ban payday loans in the name of protecting consumers. Protecting them from who?

Payday loans are short term cash advances designed to get you cash fast when you need it. There are any number of reasons you may need some fast cash. Maybe there is an unexpected bill. Maybe you want to go shopping with your friends. Whatever the reason you get a payday loan really does not matter. What matters is that legitimate businesses over a legitimate product and that is good for American business. Why try to put them out of business?

The common argument is that payday loans prey on the poor. Do banks loan to people without any income? Do credit unions loan to those with terrible credit history? So why do people think these individuals make great “targets” for payday loans? No payday lender is going to give a loan to someone who cannot pay the loan back. Most businesses do not give products to people who cannot pay for them. Targeting the poor is a terrible argument against payday loans. Those who tend to need fast cash also tend to have lower incomes. But truth be told, the median income of an average borrower is right in line with the national median income.

Another argument is that payday loans target minorities or the military. First of all, we have to understand that there is nothing predatory about payday loans. They are not preying on anybody. Any good business has a target market. Payday lenders have identified their target market and so advertising is designed for them. The law no prevents anyone in the military from receiving a payday loan and has for a year now, so that’s right out. But some minorities, particularly Latinos, are in the target market. If they are illegally here, then they don’t have bank accounts, meaning they need to cash checks somewhere. They also tend to make lower incomes and be in need of a cash advance more often than those with higher incomes. No one preys on the poor or minorities, some of them just happen to fall into the target market.

At a time when our economy is hanging on for dear life, I find it hard to believe that there are people out there trying to put thousands of people out of a job. And in the name of protecting consumers from themselves? What a terrible, terrible thing. There are much worse things in the world than payday loans, yet these activists are not trying to protect us from them. Maybe some quick research into these “consumer advocated” will help us understand their motives. Guess who the number one lobbyists are against payday lenders? Banks and credit unions. Why? To eliminate the competition of course.

So the next time you hear some crackpot going off on payday loans, look into their credentials. Are they in the lending industry? Do they sell some kind of financial product? Chances are yes, so like I said earlier, always ignore advice from people with a vested interest in your decision. You wouldn’t ask the Budweiser executives which beer they think is best, would you? Don’t you think you know what they would say? So why go to a bank for financial advice? Will they not advise you to buy their products? Keep payday loans in business and keep the spirit of capitalism alive and well in this country.

Tagged as: Payday Loans

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