Warren Bolton, Associate Editor of The State in South Carolina, went on a tirade against payday loans today. He painted the legislative scene as a battle between consumers and payday lenders and called out legislators who were on the wrong side.
Since when have consumers been fighting payday lenders? Consumers are the very people keeping payday lenders in business by getting loans from them. How about the war between retarded special interest morons and sensible freedom loving individuals? Better ring to it…
There sure are some great one-liners in this article. You’ll love this one from Bolton:
“Who would defend an industry that charges an annualized interest rate of 391 percent and repeatedly makes loans to people it knows can’t repay them?”
First of all, what’s wrong with charging an annualized interest rate of 391 percent? That translates to little over 1% per day. For a 10-15 day loan, that’s a grand total of about 10-15% of the loan amount paid in interest fees. Wow, what dirty loan sharks we must be.
Secondly, why in the name of all that is holy and sacred would someone lend money to another person if they know that person cannot pay them back? Is Mr. Bolton getting his hands on some medicinal marijuana? Perhaps taking too many prescription drugs?
All I can say is this guy made a good decision not to get into the lending business, because he would be out of business faster than you find a poorly written editorial slamming payday loans. There is not a payday lender or any kind of lender in the world who will give one penny to a borrower if that lender already knows the borrower cannot pay the loan back.
But if Mr. Bolton’s antics weren’t enough, he has to quote the genius state senator Gerald Malloy. I’m not joking here, this is actually what he said in his own words:
“I don’t understand the business model. A business that feasts on borrowers by making as many loans as possible, knowing they can’t repay them,doesn’t make sense for consumers.”
Did a state senator really just say that an industry needs regulating when he “doesn’t understand the business model?” What the hell is going on in South Carolina? Are they going to start regulating physics,biochemistry and rocket science because they just don’t understand how they work?
Of course the business model doesn’t make sense to you Mr. Malloy, you have it all wrong! Why would anyone make as many non-repayable loans as possible? How is that helping lenders or borrowers?
Now add those quotes in with this one from Bolton:
“Those who are fortunate enough to keep their jobs will become bigger targets, since you must have an income to get payday loans.”
What the hell?!?!?!?! I thought we were lending to people who we know can’t pay us back! Yet just two paragraphs later it is revealed that ability to pay back the loan is required to receive the loan? Does this guy have any idea how a loan works? Clearly Mr. Malloy doesn’t:
“There’s no merit in submitting consumers to the level of usury employed by payday lenders.”
But there is merit in submitting them to $40 overdraft fees? Or $35 NSF fees? Or $30 bounced check fees? Banks get away with highway robbery and go unregulated. Payday lenders charge people an average of $7.50 for a$100 loan for one week. For each week and each $100, add $7.50 to the fees.
Compare that to over drafting by merely $20 and you get charged twice that much in fees! Or apples to apples- overdraft by $100 and pay an average of $35 in fees. That’s a lot more than $7.50.
But legislatures will do what legislatures do best- screw up everything they possibly can without studying the facts first. I imagine that payday loans are only the first targets. Those terribly complex healthcare and educational industries must be next.
