Lawmakers in Kentucky have passed a bill that would put a moratorium on new payday lenders and create a state database of all payday loans. Kentucky’s Governor still has yet to weigh in on the bill, as spokesmen say he is still studying the bill before making a decision.
Interestingly, the bill started out as merely creating a statewide database of all payday loans. Current law in Kentucky states that borrowers can only have a maximum of two loans out at once for a maximum of $500 each. But there has been no way to enforce the bill.
Yet somehow some “mysterious force,” as on representative put it, asked for the 10 year moratorium. Further investigation shows that Bill Strong, R-Hazard, asked for the moratorium as a way to protect consumers.
Oh yeah, and Strong is married to a woman who just happens to own and operate her own payday lending business. What better way to help your business than to prevent competition from springing up for the next 10 years? Nothing shady there…
The statewide database is similar to other provisions in other states. Legislators say is is a consumer protection bill, believing that they are helping people by limiting their freedom and keeping track of their personal financial transactions.
Why so little faith in the people of Kentucky? Are people unable to moderate their own borrowing? Do lawmakers truly feel that restricting freedom is the best way to protect people? Ben Franklin said that anyone who trades freedom for protection deserves neither.
I’ll tell you what, let’s do an experiment. Let’s put all these payday lending laws to a vote. But not your regular vote. We’ll leave out anyone who has never needed to get a loan. They clearly would only vote to protect other people.
Let’s let borrowers of payday loans decide how much protection they want from themselves. Guarantee you that bill goes down burning. So why do lawmakers feel compelled to protect responsible borrowers when so many have demonstrated the ability to borrow responsibly?
Payday loans need no regulations. The only thing we need protection from is our ever encroaching government.
