DISQUS

Jon Schultz · 1 year ago

This is a biased article, as can easily be seen by use of the word "predictably" in "Meanwhile the payday loan industry released results of its own survey that predictably claimed a clear majority did not want the Legislature to ban these loans."

This implies the poll was somehow fudged, whereas it was performed by Zogby International which has no interest in the payday loan industry. Just because the industry paid them to take the poll doesn't mean the results are skewered.

It's a biased article that doesn't talk about the academic studies that show payday loans are generally a good thing, even though some people get themselves into trouble by their own misuse of them - as is also the case with cars, wine, desserts, and many other good things.

A 36% cap on loan rates makes it illegal for any New Hampshire citizen to say to any other, "I will lend you $100 today if you will pay me back $100.10 tomorrow." Is that the land of the free and home of the brave?

Consumer protection should be about curbing deceptive advertising, not telling merchants and service providers how much they can charge.

Eric Schultz · 1 year ago

Funny, I live in Oregon, and guess what, there are still Pay-Day loan stores here. So I guess they didn't all leave. A cap is a good idea. Do it. And yes, John, consumer protection IS about more than deceptive advertising. And well, obviously you have never used a Pay-Day loan, cause let me assure you, their advertising is deceptive.

Jon Schultz · 1 year ago

There are still payday loan stores in Oregon, Eric, because their law allows a 10% (of the amount borrowed) loan origination fee in addition to the 36% interest, while the New Hampshire bill that was just passed does not. This bill will end short-term loans in New Hampshire because the lender could only charge $4.14 for the average $300 loan and the costs involved in making the loan are about seven or eight times that.

Translating payday loan fees into an annual percentage rate tells you nothing about how profitable the loan is for the lender, because it ignores the cost of making the loan, and it tells you nothing about how wise the transaction is for the consumer, because it ignores what other alternatives are available to him.

Of course some people get themselves into trouble by their own misuse of payday loans. That is the case with every good thing, including cars, wine, desserts, you name it.

Not wanting to admit they were wrong, the New Hampshire legislators - and Gov. Lynch who says he will sign the bill - ignored the recently-released study by
researchers from George Mason University and Colby College which found that "access to payday loans in their environment, all else fixed, increases a borrower's probability of financial survival by 31%." See http://www.foxbusiness.com/article/researchers-...

The critics of payday lending are rebels without a cause, and they are in the process of taking away from the people of New Hampshire a valuable financial option.

Grant · 1 year ago

Would you people stop meddling please? Here is what is going to happen if you get your way; the payday loan stores are not going to be able to afford to stay open and those of us who rely on them for help from time to time are going to lose out. You don't use them, so leave them alone! The last payday loan that I received cost me $30, if I need help spending my $30, I will ask someone, but I would never ask the government to help me when they can't even replace a toilet for less than 10k. Payday loans are a help and this article proves it:

Payday lenders are the perfect target for politicians that want to seem compassionate. After all, a $15 fee on a two-week $100 loan amounts to an APR of 390% if the loan is rolled over for a year (accruing $15 every two weeks). What could be more evil than charging poor people 390% interest, right?

A recent study by the Federal Reserve Bank of New York suggests otherwise. As reported in the March issue of Reason Magazine, the study found that the citizens of two states where payday lending is banned "bounced more checks, complained more about lenders and debt collectors, and filed for Chapter 7 bankruptcy more often"1. Comparing payday lending to other options, the Community Financial Services Association of America noted that a $100 bounced check garners a $54 fee (equivalent to 1409% APR) and a $100 credit card balance can garner a $37 late fee (equivalent to 965% APR). As the study's authors write, "Forcing households to replace costly credit with even costlier credit is bound to make them worse off".

So why don't you people work on the education in this country and stop trying to ruin a good thing for those of us who need it. If you fix the education, you can educate the children about payday loans so that they can make good decisions in their life. You are tapping at the surface, get to the root.