washingtonpost.com:
For years, the country's makeshift network of payday lenders and check cashers has operated with little competition or federal regulation.
Hilary O. Shelton: Why We Need Robust Consumer Financial Protection
Our current system of consumer protection fails to protect Americans from basic exploitation and abuses that can cost individuals and families hundreds of thousands of dollars, and even their homes.
David Murdock: Online Lenders Fight Regulation (VIDEO)
Payday loan offices were sprouting up in strip malls across America for years before Wall Street collapsed last fall -- quiet evidence that hard times began hitting working families long ago.
Tram Nguyen: Predatory Lending Gets a Boost from the NYT
After the Pentagon documented the adverse impact of predatory lending on military personnel, Congress prohibited payday lenders from making loans to active duty service members.
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The wealth gap will widen to levels never before imagined while the middle class ceases. Our politicians need to do more to ensure equality.
good articles; http://bit.ly/1NkbAn
A person making 60,000 pays 20,000 of it in various taxes. A person making a million or more has a tax rate of 30% compared to 90% decades ago.
The real down and dirty part of all this is that many of the "check cashing" and "pay-day loan" offices are in fact wholly owned branches of the biggest banks on Wall Street. Yep!! The same crews that got the bailout and put everything on the taxpayers tab.
In some cases the way they avoid the connection being made is the Wall Streeters open a different Bank and then lend (front) the money for these storefront operations. For example HSBC [Hong Kong Singapore Banking Corp.] headquartered in London and advertising in supper glossy mags like Town and Country, Vanity Fair, etc owns Orchard Bank which supplies funds to the store fronts and offers ultra high-interest credit cards to people with no credit. {Do an Internet search for the term "Fee Harvester Credit Cards." } What you will learn will amaze you. --- The cards don't really extend credit; they are designed to simply bleed the victim with fees.
WE HAVE HEALTH CARE WE HAVE HEALTH CARE CONGRATS OBAMA 4 GETTING IT DONE!
good articles; http://br.st/tU
In the slimey world of business, the businesses that prey on the poorest and most vulnerable people are the slimiest.
It is shocking that they still go with little or no regulation to protect the most vulnerable from the worst vultures.
The House Financial Services Committee will be considering legislation to create a NEW government agency with the authority to make your credit more expensive and could even ban some products that you rely upon to make ends meet. Can you share with me how your life would be impacted if your access to a credit card was denied or restricted or if your interest rates were increased due to an agency decision? Also, have you ever used a non-conventional loan or line of credit to get through a rough financial time in your life? If so, please tell me about it...
Yours respectfully,
Jeb Hensarling
Member of Congress
www.hensarling.house.gov
(202) 225-3484 – DC
(903) 675-8288 – Athens
(214) 349-9996 – Dallas
I was fascinated by your comment, congressman and when I checked Middleclass.org, I was not surprised by your F grade. You just don't like anything that might benefit people or even kids (SCHIP).
Many states have come out against these "banking practices" and even in the conservative state of South Carolina, the practice of making a loan to pay off another loan has been barred.
These payday lenders are nothing but legalized loan sharks and should be totally outlawed. I hope what is being considered by the Committee becomes law even without your support.
You know those of us in the social sciences admit that we can make the statistics dance any way we want. What a lovely example of how to ask a loaded question to lead the answers the way you want them to go!
Can you share with me congressman how it would impact your life if all of your constituents had access to reliable, safe and fair credit sources? How would it impact you if your constituents had some one actually looking out for their best interests?
Athusius --the nick gives the game away. The historical Athusius was a Calvinist jurist, who was committed to a Theocracy: a government run by God, or by people who claim to have a pipeline to God. I suspect that you are a member in good standing with "The Family" the people who own the House on C Street and are analyzed in Jeff Sharlet' s book THE FAMILY.
I didn't mean it should never be addressed. It is a "side issue" at the moment because the credit card industry is the equal of the payday loan sharks, or worse. My only argument is that one needs to go for the big enchilada--the banks themselves--before getting to the much smaller industry of legal loan sharking. Perhaps, since as you say supposedly credible banks like Wells Fargo are getting some of that action, both arenas should see some attention from the politicians at the same time. But how about this: Regulate the daylights out of banks and credit card companies to prevent their slipping their greedy little mitts out the back door like this. Still, there is a need for a second-tier of available money for those in dire need...a quandary, at that level, to be sure. It seems to call for a cultural/financial overhaul of proportions that might best be described as Biblical.
These cash checking places come in handy when you are not a legal citizen of this country. Although Bank of America does oblige those without a social security number.
I have just noticed that Walmart is beginning to offer Check Cashing. Walmart is charging between 1 and 3%, though seemingly very expensive they are undercutting the old school check cashing places.
There has been an "Habla Espanol" check cashing place in my town for over a decade, and the gent who owns it charges a 25% fee to cash (his fellow) illegal resident's checks, and/or wire transfer $$ back to Mexico.
How an illegal resident manages to obtain a Business License is beyond me.
Sounds like America's next banking industry. What's next? Debtor prison and indentured servitude?
Got a mortgage or a credit card?
If so, you're already an indentured servant.
EB,... as usual,... right on the money.
Next banking industry?? Your city has no check cashing places or payday loans?
They are always a tell tale sign of a falling demographic and frequently bring down real estate values as many people recognize them for what they are....
we need to close these loan sharks down
That would be BoA.
if you close check cashing, who is going to give short term loans these people who use them.
the banks wont.
the credit cards wont.
now if the pay day lenders wont, they just have to go to Vinnie and Guido I guess :).
It's a legalized Mafia. They called them loan sharks back in the day. And when someone said they charged 25% "interest" you could hear the sharp intake of breath as they reacted in shock.
Nowadays 25% is the better rate for the people who qualify for a credit card. Your special of your lucky enough to get that rate.
These "payday lenders" make the health insurance companies look benevolent!
No. At least with Payday Lenders you know what you are getting. Insurance companies make you think you have insurance then screw you as soon as you are sick.
Good Point, My Bad!
PAY DAY LOANS ARE USUALLY 240% PLUS
this is not new, been going on for quite a while now, the less well to do caught in the black hole of everyone overcharging them for everything and taking what little money they have in fees and ck cashing charges,.
and the banks will shut you out as well.
we really need a public bank to complete with these for profit banks as well
just for curiosity...what would this public bank function like? How do you have a public bank? Banks make money by using your money to make more money. So a bank that charges zero interest and gives basically free loans...so free money? Hmmm I'm guessing most people would start using the public bank... So how exactly would private industries compete in any rational way with the government if they have the ability to just print unlimited amounts of money for their "customers" to borrow?
Years ago you didn't need good credit in order to open a savings or checking account. In fact, my first checking account was opened before "credit rating agencies" were ever conceived. I think people without credit, or poor credit should be allowed to have a simple checking and/or savings account. Do not offer 'over-draft' protection and there is no downside to providing this service. The banks haven't wanted them because they were not good risks when it comes to paying the huge over-draft fees. It's that simple and contemptuous really.
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First Posted: 10-13-09 08:09 AM | Updated: 10-13-09 08:24 AM