Tuesday, February 28, 2006

Georgian Supports End of Payday Loan Practices

By J.J. Cameron
Payday Loan Writer

Stephen Winslow is a regular contributor to The Augusta Free Press. He recently wrote an article praising the paper for shedding light on the payday loan industry.

Taking advocates of payday loans to ask, Mr. Winslow is probably a supporter of the December closing of a handful of payday advance operations in Georgia. Here are excerpts of what he had to say:

Unfortunately, there are those that are uneducated and continue to buy the popcorn that the industry continues to sell. Tom Lehman, for example, acts as though people involved in the cycle of predatory loans have a choice on whether they take a loan or not. He states that the household should be able to decide how many loans they wish to take.

I would agree if people were able to pay off the loans over a peroid of time that was adaptable to the individual’s financial state. However, thanks to lobbyists and those that do not understand the dynamics involved in this predatory practice, people are forced to roll the loans over because of unfair repay deadlines and an APR of 377 percent or so.

(Editor’s note: interest rates on payday loans vary and states have been introducing regulations to cap them).

Next, Howard Karger has the audacity to suggest that taking a payday predatory loan is like a middle-class family putting something on a credit card. If I put something on my credit card, I have a minimum payment I must make, and the time it takes me to pay the card back can be extensive as long as I make that minimum payment. If I wish to pay it back early, I should; however, if I need to take my time, I can. That option does not exist, never has, and greed will never allow the payday predatory industry to ever offer it.

Do you really think that people, if they had a payback option that suited their financial situation, would continue to take these loans? Do people like Mr. Lehman and Mr. Karger believe that this is some type of a hobby for families?

Of course not, and payday preditors know it. The industry cannot survive without the repeat customer, period. The industry knows this as well, and that is why they prescribe to the rules that currently exist, because they realize that they themselves create their own market.

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