Payday lenders. They claim to be offering a necessary service to middle class customers. But for some odd reason most of them are located in poor neighborhoods or next to military bases. Which middle class are they aiming for?
Every community has a very clear inverse relationship between the number of payday lenders and the number of traditional banks. Poor communities have fewer traditional banks, and they have payday lenders springing up like mushrooms. And vice versa for wealthier neighborhoods.
Payday lenders target the working poor who are living week to week; paycheck to paycheck. They offer short-term loans with annual interest rates up to 391%. And you thought extortion and mugging were illegal.
Some of their victims, er, customers end up taking out another loan to pay off the first loan, then another loan to pay off the second loan, and on and on. Eventually they can end up with five or six loans costing hundreds of dollars a month in interest and penalties.
Sure, you can argue that these people should be more responsible and make smarter decisions. But with this kind of lending practice, one stupid move can be compounded again and again and lead to a vicious circle. And this reasoning of “they should have known better” can be carried too far. After a point, it’s like saying assault and robbery should be legal and it’s up to everybody to learn Karate and carry a gun.
Payday lenders are exempt from state and federal usury laws, and they’ve successfully fought all government attempts to rein in the sleaze factor.
They count on people’s ignorance and desperation. A spokesman for a consumer group said “their business is geared toward confusing people and trapping them in this treadmill and squeezing every dollar that they can out of them. The whole premise behind the industry is to target a certain group of people and take advantage of them.”
No wonder conservative politicians keep cutting funds for education. More uneducated people means more fodder for their corporate donors.
Military families are some of the most popular targets of these predators. If you A) support our troops, and B) claim to be a Christian, you should be outraged at this legalized thievery. Are you?
If you think the Bible was written just to condemn homosexuals and abortion, here is what the Bible says about greed and usury. Why aren’t millions of devout Christians preaching fire and brimstone at these loan sharks?
If you support our troops, maybe you could quit fondling your yellow ribbons long enough to think about the irony here. Our government spends billions drumming up wars to send our soldiers off to. Their pay is insufficient, they’re sent into battle with insufficient armor and ammunition, their VA benefits keep getting reduced and then they get preyed on by a bunch of sleazewipe loan sharks. Are the armchair generals and fire-and-brimstone preachers planning to do anything about this?