The Post and Courier, a South Carolina newspaper, is encouraging people to stand up to payday loans, specifically those in the state legislature. They are calling on legislators to adequately protect the citizens of South Carolina.
The following is taken straight from the Truth in Lending Act:
“It is the purpose of this title to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices.”
Or in other words, the law requires every lender to adequately disclose all the terms and costs of their loans to borrowers. Borrowers are required to sign a document stating they understand all the terms and costs of their loan.
Here’s an example. A child sees his mother cooking in the kitchen. He points to the stove and asks “What is that?”
His mother replies, ” It is a stove. It is for cooking food. It gets very hot so you should never touch it when it is on. Do you understand that it gets hot and that you should never touch it when it is on?”
The child responds, “Yes mom, I fully understand that this stove is hot and I should never touch it when it is on.”
The following day, the boy sees the stove in use again and decides to go over and touch it. He gets burned and blames his mother. Is that fair at all?
Of course not. She told the boy what the stove was for and how to avoid being harmed by it. He acknowledged this and said he understood the proper use of the stove. So why should mom be blamed for doing everything in her power to stop the boy from hurting himself?
The same is true with payday loans. The terms are disclosed in full. People are aware of the interest rates. They know they are required to pay back their loan at a specific time. They are told how to properly use a payday loan to their benefit.
Now if someone fails to use the loan properly,why are the lenders getting blamed for being predatory lenders? How are lenders the bad guys here? You have to be 18 or older to get a payday loan,can we start treating these people like the adults they are?
Those who misuse payday loans will not be protected by any law banning payday lending. People who are going to do stupid things will always find a way to do stupid things. It simply cannot be prevented. If someone wants to borrow more money than they can pay back, then that is their poor decision.
I am sick and tired of people saying payday loans are bad. They work great for millions of people who have poor credit and no other access to short-term credit. It works great for the millions of people who pay their loans back on time. Just because a few people can’t pay their loans back on time, doesn’t mean payday loans are the culprit to be blamed for their misfortunes.
