Don't you think it's about time that we address the matter of predatory lending practices in America, particularly with respect to so-called payday loans? If you've never had one, then you may not understand. So, let me "school" you.
When you sign up for one, the interest rate tops what you've heard from the old time phrase, "loan sharks". That was a phrase used commonly when I was a child... on television. I never met one ( a loan shark) until I signed up for my first pay day loan about 12 or 13 years ago.
My interest rate was somewhere in the neighborhood of 144%. You have thirty days (if I recall correctly) to pay the loan back... principal plus the 144% interest. Or, you could simply pay the interest, which would buy you another month. So, let's say you borrowed $100. To use the money for another month, you had to pay them $144. Now, you could keep doing that up to 4 times, if I recall correctly. Then, according to state law (Oklahoma at the time) there is a "cooling period", which means that you had to pay the loan in full at that time, or $244. Then, you had to wait one month and could start all over again with another loan.
Once you start in one, it is nearly impossible for the average person who really needs one... to get out of the loan.
Ironically, these loans primarily target lower income citizens including African-Americans and Hispanic-Americans in the poorer parts of OKC and it was an African-American state senator who was primarily responsible for the laws' implementation in the State of Oklahoma in 2004.
These are the kind of predatory lending practices that should be repealed. They are antiquated, they are abusive, they create a financial conundrum and they prey upon those who can do no better at the time. That has to change!
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