Policymakers who want to protect these borrowers from predatory lending not only risk cutting off much-needed credit for people who really need it, but they also risk implying that the poor can't make sound financial decisions on their own.
That was the complicated dilemma facing the Obama administration earlier this year when officials proposed new restrictions on the $50 billion payday industry. Under the Consumer Financial Protection Bureau's proposal, borrowers would be allowed to take out no more than two additional loans to pay back an original loan. People who really needed a loan would be able to get one, the bureau hopes, but loans wouldn't turn into a cycle of debt.
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Only in America that we establish businesses that prey and take advantage of ignorant citizens who are and have always been financially challenged. People with bad credit who already don't pay their bills now have another avenue to further increase their indebtedness. Unethical businessman much like drug pushers, put people in a cycle that they cannot escape. These companies should be illegal and closed!
ReplyDeleteHate to be the guy holding the paper on the third loan.
ReplyDeleteThis used to be called loan sharking and we had laws against it. This is what you get from the less regulations crowd, now anything goes.
ReplyDeleteBefore payday lenders a persons payday loan was robbing the liquor store. Which would you rather have?
ReplyDelete