Wednesday, February 4, 2009

Hypocrisy in Payday Loans Legislation

Approach to payday loan law uncharacteristic

"Republican Party Elephant" logo

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I was a bit surprised to see the large title “Conservative Viewpoints” splayed across the top of this article about payday loans legislation.

See, all this time I had thought that “conservatives” were all about small government and individual responsibility. Apparently not when it comes to payday loans.

What’s all the fuss about payday loans?

Virginia lawmakers are all up in a tizzy because after they imposed limits on payday loan lenders that would essentially drive them out of business, those lenders found a way to keep their businesses afloat.

Virginia allows “open-end” loans, in which lenders can charge any interest rate they choose after a 25-day grace period. They are now seeking to ban payday loan companies from offering open-end loans. I should think conservatives would balk at the idea of placing such heavy-handed regulations on businesses.

I can take care of myself, thank you

Lawmakers in many states, including Virginia, harp on the payday loans industry, calling it “predatory lending.” They say that by offering open-end loans, payday lenders are “preying on” borrowers.

Excuse me, but those borrowers agree to specific terms beforehand. And payday loans are meant to be short-term. As long as borrowers keep up their end of the agreement and pay back the loan within 25 days they have nothing to fear. Why is it that all of a sudden these lawmakers don’t want people to have consequences for defaulting on an agreement? ... click here to read the rest of the article titled "Hypocrisy in Payday Loans Legislation"

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