Here’s one of those issues where I’d be better informed were I still at the paper: I would ask Warren Bolton what to think about the payday lending bill, and whether the governor’s veto should be overridden. Warren has kept close tabs on the legislation, and I have not.
Not that I see any merit in the veto itself; it’s standard Sanford ideology, nothing more.(For him, at bottom, it’s not that there are better ways to regulate, but that one should not regulate.) No, the issue is whether the governor’s wrongheadedness offers a chance to let an inadequate bill die.
Gerald Malloy’s suspicion about Advance America wanting the bill so badly gives me pause, too.
I’d like to talk to Joel Lourie about this. And maybe this offers a good excuse to go visit my friends at The State.
In the meantime, what do Y’ALL think?
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The idea of protecting people from themselves is abhorrent to me (with certain exceptions such as children). Require full and obvious disclosure of the terms, but if I make a choice to borrow secured by my future income and other assets and some entity wishes to loan me the money under terms I understand and accept then government has no role.
The problems start ballooning when its the head of a family making these loans, which lead to deeper and deeper debt, and mean that his family has to do without. Assuming you aren’t concerened about what happens to the person actually making the loans, how many of their dependents do you want to have to support? Greg, I understand where you’re coming from, but these people make a living off of others’ desperation. Sometimes the “others” main fault is lack of education–leading to poor job expectations, and difficulty doing simple arithmetic (to check what those interest rates actually mean).
Exploiting the poor is wrong unless it’s for scholarships to middle class families.
Signed,
South Carolina
And WE would do that? Perish the thought!
This issue is more complex than Warren Bolton would like to believe. The news template used – greedy private bankers gouging poor working people – is only part of what is going on, but it is easy to report and pontificate on.
The banks, run by the local Beautiful People who support the arts and all that, are usually behind these loan shark companies. The banks long ago quit making small personal loans. They converted everyone with a home to an equity line of credit at prime plus 2%, or a credit card at 24%.
The rest, they converted to payday loans and loan offices, which the banks finance. The banks don’t have to mess with riff raff loans at 30%, because they can make big loans to the payday lenders at 60%, or buy stock in them. Then the payday lender handles the hassle of paperwork, and charges 30% a month.
Most other non-bank lending has been outlawed, thanks to bank lobbying, so these working people are left with nothing.
Meanwhile, the liberals are fixated on their Current Big Issue, while the root causes of problems go ignored – illegal aliens taking jobs from lower-skilled American workers, paperwork and legal hassles that discourage small businesses from hiring anyone, high illegitimate birth rates among unwed teen mothers, etc.
Actually, I DID go by and visit my friends at The State this afternoon, after Rotary. And while I did learn more about what’s going on with this bill, I’m still not sure what I think.
I don’t, however, think I would sit up nights worrying about it if the veto were not overridden.
If the government wants to cap usury, they also need to reform other parts of lending.
* Require an amortization schedule for every loan at origination
* Require a monthly statement of where the payments have been applied against the amortization schedule.
* Probably do away with Rule of 78 loans, where the interest is all paid up front, and is actually much higher than the quoted rate.
* Make it easier for individuals and retailers to make small unsecured loans and loans on goods, so they don’t have to use the giant banks.
* Columbia needs to follow the lead of other cities which have set up micro lending for the working poor to get into some sort of little business, pay back the loan with reasonable interest, and get off the low-wage treadmill.
Was that really Lee making these comments? I’m shocked. What he says is quite sensible.
Yes, good points, Lee!
Let’s do it!
Not to let the moment go by, Lee made some great suggestions and just to prove it was not a fluke, the following is a quote by one of the greatest political satirists of all times and it fits in quite nicely with Lee’s comments about government spending.
“Lord, the money we do spend on Government and it’s not one bit better than the government we got for one-third the money twenty years ago.”
Will Rogers
“Thank God we don’t get all Government we pay for.” – Will Rogers
This is one of many issues I have been studying for a long time.
When I work in other cities, like San Francisco, Seattle, Portland, Madison WI, etc, I see a lot novel solutions for helping the poor. The ones that work end up evolving into some sort of free market solution.
Here is one part of what is going on in Durham, NC.
1. The Self Help Credit Union
2. A venture capital firm for tiny business startups.
3. Financial counseling at reduced rates by attorneys, bankers, stock brokers, and investment advisors.