3-CORNERED HATS

All the media attention this month has made everyone a pundit, it seems. My auntie Lexy was visiting this weekend from Madison, and after rearranging my furniture, she noticed a payday loan shop down the street. And as aunts do, she went flying off the handle. My modest neighborhood was transformed into a ghetto in her eyes once she spotted it. Payday lending was the source of all the troubles of the world, their being legal loan sharks, she said. “500% percent interest year!” she said, “those things should be banned, so the crackheads and gangbangers all go away!”

Now I’m hearing “payday lending” everywhere. It’s like a political version of last song syndrome (betcha didn’t know that was a syndrome!). It’s everywhere, I tell you. In the Union Leader.

It’s my understanding that most payday loans last a couple of weeks, a month at most. So why is everyone whining about a yearly rate? That just makes them look ridiculously high. And who takes out a payday loan FOR A YEAR?! That’s what banks and family members are for!

And why FORCE a 36% rate cap? Anything over 36% is driven by the cost of wrting such a high risk loan for such a small amount. forcing a rate cap is just a sneaky way of hamstringing these businesses and forcing them to go under. Then what will the people who need these loans do? If someone knew a way to make it work at lower rates, they’d be doing it. Last I checked, credit unions and church orgs are also offering alternatives to their members/congregations, but they’ll be taking a loss. More options are better, which is why there are 31 flavors at baskin-robbins and why there are just as many places to get a payday advance as there are ways to buy a subway. But hey, I’m just a guy with a sweet hat.