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- elebrio, on 10/12/2007, -2/+11Just to be clear for anyone who doesn't RTFA this has to do with Check Cashing outfits and not Mortgage lenders which generally bear the brunt of anti Predatory lending legislation. These check cashing shops seriously need to go. The 400% interest rate quoted in the article is actually on the low side. I have had customers that have paid over 1000% annual interest rate here in Arizona.
- cheapskate, on 10/12/2007, -20/+7So what you're saying is that the people that use check cashing outfits are animals that should be taken care of, instead of people that can make their own decisions? That's pretty radical. Since there is no force involved, I fail to see the problem - caveat emptor. The reason these outfits exist is because there is a demand for it. Why take away a product that consumers want? Surely that's only going to hurt the consumer?
- gmillerd, on 10/12/2007, -2/+4This is a good thing that its in the spot light. Banking deregulation was terrible, unlikely to be fixed however with the huge financing the world is used to. These banks don't have to even pressure anyone themselves. The people that need them so badly will likely jump at the chance to serve.
- gmillerd, on 10/12/2007, -0/+6Its about 'paycheck loans', where a $255 check for a $150 fee is not uncommon. Military families that need to use them have gotten press and people are out raged. Though the 'need' for them isn't address and the wide spread use of them by non-miltary folk is also unaddressed.
I would like to see the wording that lets the poor domestically still get worked over and the military poor get a pass. The author of that gets the soul-less ***** of the day award for sure. - ryanknapper, on 10/12/2007, -5/+3cheapskate: Part of the purpose of having a government is to protect us from ourselves. In a perfect world we wouldn't need that, but we're still a couple of months away from setting that plan into action.
- elebrio, on 10/12/2007, -2/+2@cheapskate There is a demand for crack cocaine on the streets too.
- Rodzirra, on 10/12/2007, -1/+3I digg ya, cheapskate. I can't see why anyone would want to use violence to prevent people from voluntarily and peacefully doing business.
- cheapskate, on 10/12/2007, -1/+1@elebrio:
And who do you presume yourself to be telling me what I can put in my body? - cheapskate, on 10/12/2007, -2/+1@ryanknapper:
You obviously have no problem with other people thinking for you, but I do. Why should I suffer for your weakness? - ryanknapper, on 10/12/2007, -1/+1cheapskate: Meth is also illegal. In a better society it would be perfectly legal and no one would touch it.
- lateralus, on 10/12/2007, -5/+8"...the reason that these outfits exist is because there is a demand for it...."
Slippery slope, *****. Just because there is a demand for it doesn't mean it should go unchecked and unquestioned. It's just the way it goes, many people are stupid and NEED government to step in and assist by calling something criminal.
The consumer also wants animal pr0n and coke, should it be made available????
idiot. I hope you're too young to be allowed to vote.- lateralus, on 10/12/2007, -1/+7@Cheapskate
I apologize for going over the edge there. I didn't want to insult. That was lame of me. - w0rd, on 10/12/2007, -0/+3That kind of apology is rare, especially without prompting. Good on you.
- cheapskate, on 10/12/2007, -2/+1No offence taken - I was thinking you were trying to be all scholarly. To your point, however: If you want to care for the so-called "stupid people", go ahead. However - why are you making it my problem? I simply do not care for your opinion (that is all your post is, after all). If you can bring some real arguments to the table as to why it should it be my problem, then I might listen.
- shaggtastic, on 10/12/2007, -1/+1It is your problem because the stupid people have an impact on your life. If they are less desperate, then they will do fewer desperate things that are bad for you. I don't understand why this isn't obvious.
- lateralus, on 10/12/2007, -1/+7@Cheapskate
- realitybased, on 10/12/2007, -0/+8Well, cheapskate, they are called predatory lenders for a reason. The practices usually involve a failure to disclose, and they lend to people who are at their most vulnerable. That there is a "market" for a money product at 400% interest speaks volumes about the flaws in your position that regulations will hurt the consumer.
- cheapskate, on 10/12/2007, -2/+2No, _you_ call them predatory lenders. I call them businessmen providing a service that consumers are prepared to pay for. I think you should back up your allegations that there is in general a failure to disclose in all cases like these. Contract law has been with us for centuries, and anything not disclosed in the contract is simply not enforcable.
- TheNik, on 10/12/2007, -2/+4Are we talking about those Check Into Cash places?
Like, you write them a check and they give you money and you pay them back like $30 more in two weeks?
What's wrong with them? :(- jgerland, on 10/12/2007, -1/+5It's more like, they give you $100 today if you give them $200 on Friday when you get paid. It's sick what they do and I CAN'T IMAGINE how any politician can even support such a thing - even with campaign donors.
Regardless of what we think of the war and the administration, we ALL care about the troops and to think that they are being taken advantage of like this is just f'd up. - Cfire, on 10/12/2007, -0/+1Because these businesses are running as loan sharks.
Value of the payday loan advanced on 27 September 2004 $400.00
Amount paid by the borrower on 14 October 2004 $451.28
Term of the loan 17 days
Breakdown of amount paid by borrower:
Principal $400.00
Interest $8.64
Per item fee $9.99
Cheque-cashing fees (7.99% of principal and interest) $32.65
Effective annual rate of interest 1,242%
The reason this is wrong is the government has legislated maximum interest rates per year. In Canada the maximum rate is 60%. This example shows that the loan company is charging over 1200% interest.
“In the United States, usury laws are state laws that specify the maximum legal interest rate at which loans can be made. Congress has opted not to regulate interest rates on purely private transactions, although it arguably has the power to do so under the interstate commerce clause of Article I of the Constitution.
Congress has opted to put a federal criminal limit on interest rates by the RICO definitions of "unlawful debt" which make it a federal felony to lend money at an interest rate more than two times the local state usury rate and then try to collect that "unlawful debt"- Source 18 USCA 1961 B(6)(B). See Racketeer Influenced and Corrupt Organizations Act”
http://en.wikipedia.org/wiki/Usury
http://en.wikipedia.org/wiki/Loan_shark
http://www.parl.gc.ca/information/library/PRBpubs/prb0581-e.html#causes
http://www.acorn.org/fileadmin/International/Canada/Reports/Payday_Lending_Report.pdf
- jgerland, on 10/12/2007, -1/+5It's more like, they give you $100 today if you give them $200 on Friday when you get paid. It's sick what they do and I CAN'T IMAGINE how any politician can even support such a thing - even with campaign donors.
- gardnert1, on 10/12/2007, -3/+1well, given what we know now that seems like the exact OPPOSITE of what we want.
- tmachine, on 10/12/2007, -0/+3my mom got caught up with these check cashing company and the 400% is true. She borrowed $3000 on her car and before it was all said and done, she paid over $12000.
The only reason she paid it off was that our state passed a law forcing the check cashing company to lower it's rate.- cheapskate, on 10/12/2007, -4/+2Not to be rude, but your mom "got caught"? Did they lay a net out for her in the street, or did she visit their offices?
- Phrag, on 10/12/2007, -0/+3Have you ever had to pay a bill, cheapskate? If you are not well paid (like alot of people in the military) and your car breaks down the banks will not give you a loan to fix it nor will credit card companies. You need to pay the bill to keep the electricity on or the gas on or the car running or else you loose everything because you can not continue to live or work.
That is how these people are trapped into going to these places that know how desperate you are to get the money. Instead of running a respectable business that charges a reasonable ammount of interest so that people can get back on their feet while the business makes some money, they take advantage of the poor and make them pay rediculous ammounts of interest (400-1000+%) which is wrong.
The way you keep talking makes me think that you either live with someone that takes care of you or have been raised by a family that is well off financially so you always have someone to ask for money when you need it. Not everyone has these benefits in life and it is not their fault so they should not have to suffer because of thier misfortuen and others greed. Get it?
- sjbdallas, on 10/12/2007, -0/+3I think the issue might be that there doesn't seem to be any requirements on the interest rates being charged. People do get into binds and need to borrow money from these sources because they don't have any other options. It's not really fair to charge them so much interest that it keeps them getting into trouble over and over again. Usually lenders can charge high interest rates because there's an increased chance of default. But these check cashing lenders already have everythign they need to collect and probably don't face the types of issues with defaults that credit cards companies might face.
- cheapskate, on 10/12/2007, -2/+2So what you're proposing is to take the only options they have away from them?
- sjbdallas, on 10/12/2007, -0/+2CHEAPSKATE:
No, I don't think it should be taken away, i think it should be regulated somehow. A maximum interest rate or something.
- lebaige, on 10/12/2007, -3/+3For some reason this issue really bugs me. It rings of pandering, nobody would give two ***** if they didn't include the word "military" after the targetting part.
These lenders suck, but they're targetting poor people in general. It just so happens military bases tend to have a lot of them. - HarryBauzonia, on 10/12/2007, -7/+9A couple of points:
1. No one is forcing anyone else, military or otherwise, to use these places.
2. Several years ago, I was in a spot where I needed to use a check cashing outfit, and it worked out fine.
I didn't have a credit card (long ugly story), and I needed an extra $150 in order to make a car payment on time. I wasn't going to get paid for another week, so I wrote them a check for 10 or 15 bucks over the amount and made my car payment. It's not like I could get a $150 dollar loan anywhere else. I got paid, and the check cashing place got their money. Everyone was happy.
The problem occurs when people with little or no money coming in use check cashing places to get "extra" money so they can buy things they can't afford. As with any other financial dealing, you have to exercise responsibility, and it's just a fact that people who get in trouble with these places are regulars who in the beginning viewed this as free money.
I don't want yet another law on the books designed to make the government my mommy. For the record, I'm also ex-military.- tucsonwc, on 10/12/2007, -4/+4Glad to know it is patriotic to fleece our military personnel. It must be sweet to take money from a young soldier. Do they get bonus points if they are injured?
- tepidpond, on 10/12/2007, -1/+1I'm in the military,
I'm E-4.
I have two kids, and a wife who doesn't work.
Somehow, I manage to pay all my bills, live in a nice home in an excellent neighborhood, and still have money to splurge on things like a RoboRaptor or a weekly movie night. Maybe if I had a car payment, exorbitant student loans, and huge credit card debt, then I'd have a problem.
It's all about managing your money...the military pays a perfectly livable wage. - HarryBauzonia, on 10/12/2007, -1/+2Agreed with tepidpond.
When I was an E1-E3, I knew damned well I didn't make enough money to be married. The people you hear about who are living on food stamps are the idiot 18 year old E2's who married the girl they knocked up right out of high school. If they weren't in the military they'd be living on welfare in some trailer park instead.
I once heard a crusty old Master Chief tell a guy, "no one issued you a wife with your seabag, son".
Wise words.
...and tabhastal, the pay is something you agree to before you join. Remember the contract and all that? It doesn't absolve you of responsibilty to look after yourself.
- toliman, on 10/12/2007, -1/+2wasn't this an issue they brought up in that tv show "the unit", ?
maybe its a political issue that gets in the way of this, but IMO the only way to get out of predatory financing with the families of army personnel would be to set up some kind of creepy anti-commercial investment fund for US military & government personnel to pool resources and capital
like uhh, bank of america's setup with the DoD and other US banks setting up community/assisted loans using the collateral of US gov resources to secure loans where ppl's debt or credit rating is preventing them setting up overdrafts, car loans, long-term unsecured loans, mortgages, etc.
still, if it were supposed to be fair and equitable, banks wouldnt make money out of it. if it were a campaign issue, it would be passably interesting to see who would try to take advantage of the moral high ground by being the person bleeding the least out of the families helping the US gov out - HarryBauzonia, on 10/12/2007, -9/+5Since when has thinkprogress.org given a tinker's damn about members of the military?
...oh....wait.....of course!!! A chance to slander a republican! I knew they couldn't stray too far from their left-wingnut roots.- tucsonwc, on 10/12/2007, -5/+7How is it slander you moron? He is taking $$ from one of the firms that does this?
go read it again. Unless you can't stomach reading something about a Republican staying true to their TRUE base, the corporations and the rich. Republo-cognitive dissonance.
Can't face the truth.
And of course you don't want to face that it was REPUBLICRATS who passed laws to favor credit card companies and slam the poor and middle class. Right after they gave the richest in the country a MASSIVE tax break.
Must be hard putting your fingers in your ears AND covering your eyes at the same time. - w0rd, on 10/12/2007, -2/+3@tucsonwc
When you say "republicrats" you do mean both Democrats and Republicans right? They are both corrupt corporate pandering scum of the earth. The things people do for money...
- tucsonwc, on 10/12/2007, -5/+7How is it slander you moron? He is taking $$ from one of the firms that does this?
- Zayphar, on 10/12/2007, -3/+4If a business can't stay in operation earning a 40% profit margin then they just don't deserve to survive.
There is no way that society should allow 400% to 1000% profit margins in money lending. That is just makes no sense.- HarryBauzonia, on 10/12/2007, -6/+5Then the "society" shouldn't give them the business. If you don't want a company to make obscene profits, don't use the company's services. You boys need a mommy who loves you, not a government to take her place.
Hey wait, that's what thinkprogress.org is all about. Now I get it.
G'night commies. - cheapskate, on 10/12/2007, -3/+2@Zaephar:
Don't confuse interest rate with profit. Just because a company earns a high percentage of interest, does not mean it makes a profit. The real reason these interest rates are so high, is that the customers of these companies are poor credit risks, and the businesses, in order to stay in business, have to charge a high interest rate to the customers as a group.
If these business were making an inordinate amount of money, other business would immediately enter the market offering better rates, and be prepared to make less of a profit. The fact that they don't, and that the interest rate does not get pushed down, means the rewards barely exceed the risks.
- HarryBauzonia, on 10/12/2007, -6/+5Then the "society" shouldn't give them the business. If you don't want a company to make obscene profits, don't use the company's services. You boys need a mommy who loves you, not a government to take her place.
- Zayphar, on 10/12/2007, -1/+3Even pharmaceutical companies with legally protected profits only make profit margins of around 15-25%.
This situation is different for military people. Under military regulations it is an offense to default/make late payments on debts. A situation that for civilians would be embarrassing and inconvenient, for a military person it might wind up with a criminal charge under military law. Young enlisted people can be easily coerced or extorted by money lenders in this type of situation. They should be protected by the law.
This is not about some fantasy theoretical free market inside your head. If you want free markets to survive in a democracy, then predatory and corrupt commercial practices must be regulated by the government. They is how the real world works.
- from a former US Navy vet (i.e. definitely NOT a liberal) - tas783, on 10/12/2007, -3/+1I have a huge amount of respect for the military, but I honestly have to say that there comes a time when personal responsibility has to come into play. If you want to give military personnel a VA loan, discounted medical insurance, drivers insurance etc etc that's great. I draw the line though when the government is called in to tell someone how to run their private company how much they can charge for something. If they wanted to help out military personnel they would raise their pay, not slap a band aid on a huge gaping hole. People need to use common sense. If you can't afford to make the monthly payment don't get a loan. I'm so tired of all the people, non-military or military who screw up their lives and expect the government to fix it. As to being predatory I don't think some guy held a gun on them and said take the loan or your dead. If these companies were so large and powerful that they could alter, change, or work outside of market forces then the government should probably take a look, but ONLY if these companies were breaking antitrust laws, because last I checked it was still okay to make money in America.
On a final note @ ryanknapper. The role of the government is NOT to protect us from ourselves. It is to act out the will of the people, protect liberties, build roads, etc. etc. It is NOT the governments job to tell me not to touch the stove because its hot, not to tell me where to place my money so that I can retire, and NOT to take part of MY money and give it to someone else who is down on their luck. - Soldan, on 10/12/2007, -0/+3National Guardsmen's families seem most at risk here... I have doubts military pay is anywhere need private sector pay...so its very easy to get way behind with no recourse...the guard are for all intents and purposes minutemen.... they would have been more useful fighting fires and helping the south rebuild than being shipped overseas .. I dont recall them being called the iraqi guard..
the only things I can see having credit for is...cars and homes that is it... education should not cost as much as it does...often its like playingthe lotto you have no assurrance that your degree will be worth what you paid for it.. - davidron, on 10/12/2007, -1/+0Why would legislature be passed that is so narrow as to only protect military personnel.
We're looking at a free market situation. Apparently, these people are a high risk which is why low rate loans aren't available to them. If a law requires that interest rates be set to 10%, these businesses would simply close up shop and anybody caught in a pinch would be screwed. Anything above 10% will cause SOME (or perhaps all) of these business to close up, shutting out many (if not all) caught in a pinch.
The government is the employer of these people. It KNOWS that these people have a check coming and even have control of that check before the employee. The government has a better understanding of the risk associated with each individual involved.
Instead of passing laws and messing with the free market forces and inducing people to enter bankruptcy instead of grabbing a high-rate loan, why not just force the government to provide the service at a lower rate for military people? - techndu123, on 03/08/2008, -0/+0
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