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A Life on the New Planatation Thread: PayDay Lending

Do I need to mention that Wells Fargo has given me a $20k open line of credit for 4.0% APR? I use it to pay off my credit cards each month because: my address and ability to pay. They also own a lot of payday loan places who prey on the less credit astute.
 
The terms on these loans are awful, sure, but they are targeted toward people that ruined their credit and nobody else would lend to.
Furthermore, nobody is holding a gun to their head and it's their responsibility to read all the terms and conditions before signing their name on the dotted line. So comparing it to slavery ("new plantations") is ridiculous.
 
Wait, is it OK to compare a voluntary loan of a few hundred dollars to slavery now?

These racial insensitivity waters are tricky to navigate.
 
Derec said:
The terms on these loans are awful, sure, but they are targeted toward people that ruined their credit and nobody else would lend to.
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Not necessarily. A lot of poor people have no credit. They may pay their bills on time, but lack credit cards or bank accounts. And not everyone wants to go to their banker and let them know that they are about to become insolvent, especially if they are hanging a sheet until Friday. (A service that liquor stores once provided.)

Furthermore, nobody is holding a gun to their head and it's their responsibility to read all the terms and conditions before signing their name on the dotted line. So comparing it to slavery ("new plantations") is ridiculous.
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They are stupid and ignorant and therefore deserve to get into trouble. Nice.
 
Derec said:
The terms on these loans are awful, sure, but they are targeted toward people that ruined their credit and nobody else would lend to.
Furthermore, nobody is holding a gun to their head and it's their responsibility to read all the terms and conditions before signing their name on the dotted line. So comparing it to slavery ("new plantations") is ridiculous.
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I'd add that while some of the terms may seem onerous, the high interest rate is necessary for the transaction. Loaning out $500 - $1000 at 4% interest would not be a viable business model.
 
So a viable business model is to loan money to people who can't (or don't) pay their existing debt at rates that make this new debt harder to pay back?


Hmmmmm.

I don't doubt you make money making people pay high interest.

Loan sharks have always been successful businessmen.

Yet no one wants to be called one.

Funny that.
 
Trausti said:
Derec said:
The terms on these loans are awful, sure, but they are targeted toward people that ruined their credit and nobody else would lend to.
Furthermore, nobody is holding a gun to their head and it's their responsibility to read all the terms and conditions before signing their name on the dotted line. So comparing it to slavery ("new plantations") is ridiculous.
Click to expand...

I'd add that while some of the terms may seem onerous, the high interest rate is necessary for the transaction. Loaning out $500 - $1000 at 4% interest would not be a viable business model.
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Not at 300-1000% which is the common APR which is not loan at a high-risk and reap a respectable profit model, but a let's bilk the unsuspecting for every cent we can. Before these companies came along, 33% was considered "loan shark" interest and companies that made high risk loans did just fine. The system is designed to trap a consumer in a cycle of debt. In fact, if you watch the video the business plan of one of the largest and "most respected" companies actually spell this out EXPLICITLY in their training materials.

- - - Updated - - -

dismal said:
Nice Squirrel said:
They are stupid and ignorant and therefore deserve to get into trouble. Nice.
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That is your general premise? People are stupid and ignorant?
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Yes. Obviously, from the context I wrote it in. There could be no other interpretation. You are a perfect candidate for a loan.
 
dismal said:
AthenaAwakened said:
Only for people who choose to navigate them while blindfolded and deafened.
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Like Martin Bashir?
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no, like posters on the internet who don't want to deal with the actual OP but want to pick fights on matters they don't understand and have already had their clocks cleaned regarding many, many times by many, many people. :)
 
Don't automatically assume that debt ISN'T a form of slavery, just because on the face of it, it is voluntary.

Remember those big companies, who would build factories out in the boondocks, and then hire workers who would move there to work? Only the company not only owned the factory, but also the apartments they rented (couldn't buy, of course) and the shops that they bought their food and other necessities at? So the companies controlled wages AND cost of housing AND cost of food? And then they made sure that the workers would have to borrow (from the company) in order to live? And if they tried to leave without paying their debt, they could be thrown into prison?

My point is that debt CAN be used to enslave people.
 
AthenaAwakened said:
So a viable business model is to loan money to people who can't (or don't) pay their existing debt at rates that make this new debt harder to pay back?


Hmmmmm.

I don't doubt you make money making people pay high interest.

Loan sharks have always been successful businessmen.

Yet no one wants to be called one.

Funny that.
Click to expand...

The alternative is that these businesses not exist at all. I don't like payday loan outfits and would warn anyone to steer clear of them. But people making these decisions are adults and ought to be treated as adults. It is not as if the high interest rate and payment timetable is not known before the borrower accepts the money. On top of that, most states already regulate payday loans - including cooling off periods. http://www.paydayloaninfo.org/state-information So this seems a bit of faux outrage.
 
This is how it works:
was born one mornin' when the sun didn't shine
I picked up my shovel and I walked to the mine
I loaded sixteen tons of number nine coal
And the straw boss said "Well, a-bless my soul"

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store
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Except now the whole country is a company store.
 
Ohio passed a referendum that banned these places. The referendum apparently had a major loophole and they aren't closed.
 
Nice Squirrel said:
Not necessarily. A lot of poor people have no credit. They may pay their bills on time, but lack credit cards or bank accounts.
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And the banks aren't exactly welcoming to people with no credit. You don't even have to be poor. When I needed a loan to buy a car - not a new car, but a used car from a guy where I worked - no bank would give me the money. I was working as a cook, had been at the same job for awhile, but didn't have any credit history. No bad credit, no bankruptcies, just no credit, so they wouldn't cough up a dime. I managed to get a loan from a credit union eventually, but the rate was pretty high.

A few years later I moved to a new town and tried to open an account at the bank down the street. Since I had just the one loan on my credit history and not much else, the only account they would open was one with a minimum balance bigger than my meager paycheck. Again, not poor, just not making a lot of money and no credit.

So I wound up using a check cashing place when I got paid. They took a percentage of my little paycheck and charged for the money orders I bought to pay my bills. If I'd had any kind of emergency like a medical problem or a car wreck I'd have been screwed. It took awhile to get on my feet, but I did. That was over 20 years ago, and it is worse now. Want to rent an apartment? Credit check. Open a bank account? Credit check. Employers are running credit checks now, too, so you may not even be able to get a job to put money in the bank that won't take your business.


So financially you can hit rock bottom without ever leaving the ground...and that's where the vultures from the payday loan industry circle.
 
Trausti said:
AthenaAwakened said:
So a viable business model is to loan money to people who can't (or don't) pay their existing debt at rates that make this new debt harder to pay back?


Hmmmmm.

I don't doubt you make money making people pay high interest.

Loan sharks have always been successful businessmen.

Yet no one wants to be called one.

Funny that.
Click to expand...

The alternative is that these businesses not exist at all.
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there is no in between, nothing between not loaning to poor folks and charging poor folks upwards of over 1000% interest? I somehow doubt those are only two choices. But do go on.
I don't like payday loan outfits and would warn anyone to steer clear of them. But people making these decisions are adults and ought to be treated as adults.
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True.
It is not as if the high interest rate and payment timetable is not known before the borrower accepts the money.
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having information available and understanding information are two different things. And then there is the sales pitch. Add to that a person in, sometimes desperate need of cash right now, what people know can lose the battle of best choices to desire to believe the hype.
On top of that, most states already regulate payday loans - including cooling off periods. http://www.paydayloaninfo.org/state-information So this seems a bit of faux outrage.
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don't think so.
 
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