Letter Response to Virginia Payday Loan Praise
The following is a paraphrased Letter to the Editor from The Free Lance-Star:
I would like to respond to Lawrence Meyers’ letter defending payday loans ["Payday loans aren't a bad deal ," Dec. 26].
In order to defend the outrageous rates that payday advance lenders charge, Mr. Meyers states that banks have made much more on NSF and overdraft fees than payday lenders make on their rates.
The difference between payday loans and a checking account is that supposedly cheap payday loans are a predatory lending practice targeting low-income households and people who have to live paycheck to paycheck.
Banks hold money that is provided to them by their customers, and they charge NSF and overdraft fees as a penalty for spending more than is available, just as credit card companies charge an over-limit fee when you exceed your credit limit.
To defend the highly predatory practices of payday lenders, Mr. Meyers may as well be defending a loan shark, only instead of breaking a bone when you don’t pay them back, the pay day loan may be the straw that breaks a family’s financial back.
Charles J. Shumar
Stafford