Thursday, April 30, 2009
Legislature / Silverman / The Economy Harper's Investigates the Sinister World of Tennessee's Payday Lending Industry
Posted by Jack Silverman on Thu, Apr 30, 2009 at 6:08 AM
When the next payday arrives, most borrowers can't afford to repay, so they extend the loan until the following payday by paying another finance charge. (In Tennessee and many other states, a borrower technically cannot "extend"' the transaction, but lenders make it a trivial process to pay back the loan and immediately take out a new one, adding another finance charge on top.) Like a sharecropping contract, a payday loan essentially becomes a lien against your life, entitling the creditor to a share of your future earnings indefinitely. Even the industry-sponsored research cited on the Check Into Cash website shows that only 25.1 percent of customers use their loans as intended, paying each one off at the end of their next pay period for an entire year. Government studies show even lower rates of customer payoff. North Carolina regulators found that 87 percent of borrowers roll over their loans; Indiana found that approximately 77 percent of its payday loans were rollovers. This is hardly surprising, of course: if your finances are so busted that a doctor visit or car repair puts you in the red, chances are slim that you'll be able to pay back an entire loan plus interest a few days after taking it out. "On average", Jeremy Tobacman, a Wharton professor who studies the industry, drily put it, "payday borrowers seem to be over-optimistic about the future".With the debate over who's more to blame for our current financial crisis--predatory lenders or irresponsible borrowers--going full-bore, Brook's piece is highly recommended. And his profile of Check Into Cash's Jones, who fancies himself quite the philanthropist and humanitarian, is every bit as compelling as his analysis of the industry.
Comments (16)
Showing 1-16 of 16
W. Allan Jones and family are a bunch of slime balls!
Dirt bags! How can any of you look in the mirror!
I couldn't live with the guilt!
You greedy F*cks!
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Everyone should read this article. This article should be mandatory reading in every high school civics class in this country. Wow. Now the rest of the United States is beginning to look like Tennessee. How awful for them! They should elect a legislature like ours, that'd speed the process!
Very vivid imagery, "lives disentergrating in frame by frame, every two weeks.." This is NOT the American Dream, folks. This is what we have become in our "free market" economy, especially in the last eight or nine years. Early '90's there were no payday loan companies, now there are bunches of them. These things are a force of evil! Wake up! As the credit card companies had laissez-faire to set their own rules for the last twenty years in our free market trickle down economy, so the payday companies are lobbying and getting their own way as they enslave the under-paid, the under-educated, those working people who get behind and are unwise or unfortunate. Next, they'll be selling their kidneys, their eggs, maybe even their children.....?
Malthus, who was one of Darwin's inspirations, said we as a society should let them go, it would strengthen the gene pool if these people were allowed to die out before they could reproduce. How funny that all these right wing Christians who espouse "no welfare, make them all work, don't give anything to anybody, no socialism, no new taxes, no health care for the poor, etc" are spouting doctrines from one of the prime evolutionists of the past. It certainly wasn't Jesus' idea.
Who is my neighbor? What're we supposed to do with them?
I wouldn't be calling someone a slim ball, dirt bag. Looks like you should be supportive of native a Tennessean. This man is responsible for creating more than 4,000 jobs across the country. In Tennessee Check employees nearly 400 people not including the numerous vendors who depend on them for livelihood. He has given millions of dollars back to his community and state. A true Statesman.
Looks like you should be supportive of native a Tennessean.
Who do you think he's preying on? For all those 400 working Tennesseans that Check employs, how many tens of thousands more do you think are footing the bill?
Yeah, I'm a little stunned anyone could have praise for that guy after reading the article. You did read the article, right?
A 230 dollar loan is a lien against your life? Ridiculous. If you need 200 bucks, go to your bank and see if they'll give it to you even with good credit. They'll offer you a $1000 loan charge you underwriting fees and interest...this is far more than 230. They also report to your credit bureau and put liens against your house if you don't pay on time. Some people (even those with bad credit)can add and figure out which one costs them less money and time.
Also, the Coalition for Responsible Lending that The Occasional Muse appears to be pushing the story for is a non-profit started by Herb and Marion Sandler, known for creating the Pick Your pay subprime mortgages that many claim are responsible for the mortgage crisis. http://www.cbsnews.com/stories/2009/02/13/60minutes/main4801309.shtml. I don't think I'd take their opinion on anything.
Anyone who has to drop the "F" bomb in a posting like this is most likely the real slime ball.
Regulator reports showing that more than 90% of payday advances are repaid when due debunk the allegation that payday lenders don't consider borrowers' ability to repay. Moreover, all reputable payday lenders have underwriting criteria and requirements of a steady income and checking account.
One of payday lending's largest opponents, the Center for Responsible Lending, is among those set to benefit if payday lending is banned. CRL is the creator of the Self-Help Credit Union.
Dear lalaland,
Please consider reading things more carefully before you make assertions. The Coalition for Responsible Lending in Tennessee (CRLT) is different from the Center for Responsible Lending. CRLT was actually started by some youth at Stratford and Maplewood High Schools (through Oasis Community Impact)in conjunction with the Neighborhoods Resource Center and other nonprofits.
Jack, thanks for the link!
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Thank you for sharing this !
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W. Allan Jones and Check Into Cash are disgusting bottom-feeders. Check this article out to find out the type of person you are dealing with if you are desperate to get a payday loan from Check Into Cash or W. Allan Jones:
http://paydaystorefinder.com/article/portr…
