Tuesday, July 01, 2008

Part of the problem

Final test tomorrow night.  Then vacation and some much needed golf and relaxation time.




You know, we can bitch and moan about gas prices all we want, but that’s not the real problem in poor neighborhoods.

Check this out:  http://www.cashnow.com/disclosure.html


Keep reading toward the bottom…  and you’ll see “The finance charge for these loans is based on 485.450 percent APR and the number of days of the loan.”


485.45 PERCENT!!!

In the FAQ they answer the question “HOW MUCH IS THE FINANCE CHARGE?”
“The Annual Percentage Rate (APR) on a typical 14 day loan is 520.00% to 782.14%, which is $10.00- 30.00 per every $100.00 borrowed. You can also renew your loan.”


Dude.  That’s expensive.  That should be illegal.  The oil companies aren’t gouging, the banks are.  If you rolled up to a gas station with an empty tank and they said “rather than the $4 posted price, we’re going to charge you $109 per gallon”, there’d be a lynch mob forming.

On the other hand, you roll up to a payday loan shop with no money in the bank and they say “instead of 19%, we’re going to charge you 27 times that much” we blame the poor people.


“Yea, but they don’t have to take out a payday loan.”


Yea, but they don’t have to eat, either.


I mean, look.  If Barak Obama is going to try and pull the wool over our eyes and claim that people are quitting their jobs because they can’t afford gas, he should step up and demand that there be a cap on interest rates charged by finance companies.  If he really cared about the poor neighborhoods where he stomped around as a community organizer in Chicago—the only real “job” he ever had as far as I can tell—he’d vow to fight these loan sharks who dole out cash to people without regard to whether or not they can pay it back and at huge rates.


Yes, when you’re down to your last $50 and your car battery breaks down, and you need some quick cash today and payday isn’t until 5 days from now, the payday advance office is a godsend (though, which god is debatable).  But to then turn around and charge 300% to 800% turns that helping hand into a smack in the face.  It’s as if I say I’ll give you my kidney to save your life, but I’m going to take both of your legs as payment.  There’s a difference between a vital service and gouging.


“But the banks won’t make any money.  The risk is too high.  Cap the rate and the loan shop shuts down then nobody is being helped, not even the responsible ones who pay back their loan.”


Nobody is being helped now. 

Congress should be passing laws to protect the people, not the banks—at least that’s what a REAL populist and new type of politician would be saying. 

The risk is already too high…  for the customer.


If the world’s largest financial conglomerates (who can afford to lose billions upon billions in bad home loans and still come out as viable enterprises) can’t afford the risk on a $500 loan at a fair price to the customer, then they don’t need to be in the business of banking.  Besides, they’ve already had their asses covered with the most draconian bankruptcy “reform” ever passed since they allowed debtor’s prisons.


He was willing to do it for the military in 2005.  His opponent, Senator Clinton cosponsored the bill that passed the Senate with unanimous consent.  Why not do the same thing for civilians?


Sure, I know that both parties are in the pocket of the banks.  Sure, I know that GW pushed through bankruptcy “reform” in a huge giveaway to the banks with bipartisan support.  What makes me think McCain will be any different?  I think he might at least listen to the public outcry (as evidenced by his shift on immigration policy after listening to public outcry…  though I STILL disagree with his position there).  Barak, on the other hand, has decided a path on which to go, which troubles me.  He thinks HE will be setting this country on the path to greatness.  You know, ‘cause we’re not already a great country.  Will he listen to the people, or his party.  He’s fond of saying that McCain voted with Bush 90% of the time or some such…  but he voted with Nancy Pelosi and Harry Reid what percent of the time?


I WANT to believe that he’s a different kind of politician.  I really, really do.  And not just the typical fear mongering, elitist, class warfare liberal we’ve all grown to know and love.

Just show me something…  anything.  I’m listening.  And waiting.


Blogger Gimpson said...

Well, there's this and it's specifically addressed on his website here. (Payday loans are specifically mentioned under the "Reform Bankruptcy Laws" section).

11:30 AM  
Blogger Brother Joe said...

That's definately something...

And during his long, illustrious career in the Illinois state senate he sponsored legislation to fight predatory lending, though his support of the 36% cap on interest rates hasn't materialized as actual legislation in his 2 years as a US Senator. Then again, McCain's been there since the begining, and no legislation from him, either.

My hunch is that nothing will change, no matter what they say.

1:50 PM  

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