Watchdog: As James Bond once asked, why is it that people who can’t take advice always insist on giving it?
The federal government is $19 trillion in debt, yet last week the nation’s newest major regulatory agency tossed out 1,300 pages of new rules for the payday lending industry and it did so, we are told, because it is worried about Americans getting into too much debt and being unable to repay.
That’s rich.
The new rules issued by the Consumer Financial Protection Bureau will send shock waves through the payday lending industry, likely forcing about 85 percent of storefront payday lenders to shut their doors. But who would shed a tear at the possible demise of that neon-tinged, usurious industry, where people who don’t have any money or credit to begin with can get a small amount of cash if they agree to outlandish interest terms.
Certainly not CFPB Director Richard Cordray.
It’s a sharia thing. No usury, unless a goat devotee wants to use a goat.
This comes up every few years. They try to regulate, and in doing so always make it worse for poor people. Yes, being poor is expensive – if you need cash you have to pay usurious fees to get it. But all government intervention does is make it even harder to get and more expensive.
As with socialism it’s always ‘but we’re going to do it right this time’. Nope.
They pretty much got rid of payday loans in Ohio; replaced by Title Loans; so now the poor people – instead of just owing a lot of money – lose their cars.
Yes, payday loans are a bad idea for virtually everyone. But regulating payday loan companies will force many of these lenders out of business, and return these types of borrowers to street corner loan sharks because people who rely on payday loans will find a way to get payday loans.
Having been poor at various times, I understand how poor people get screwed when it comes to credit. But I also realized that a large part of that problem was me, which is not a lesson many people want to learn. Demanding that the government “fix” problems which are frequently self induced is just not a good idea and rewards destructive behavior.
I see people sending Western Union all the time at the grocery.
They charge you out the ass. PayPal and other services have helped some, but some people don’t want to bother setting up a bank account.
I would rob a liquor store before going to a Payday lender.
It used to be that nature had ways of culling the terminally stupid, but we have intervened and chosen to protect them.
By doing so we have created an obligation to care for them, and that means creating disincentives for those that would prey on them.
A better solution would be to sterilize them and place them in a camp somewhere that has a mild climate.
Most of these types of regulation come from the industry and are designed to snuff out the competition. Lending has always been protected by legislation designed as such. states always have had usury laws that protected licensed or chartered loan sharks. this is same old same old.
@Wyatt – They’ll no longer be in debt up to their eyeballs, because they’ll lose their kneecaps first.