I blame my family. Curse them for making me curious about the state of politics in this country! And it seems that the state is “we tell them what they’d prefer to hear, rather than what’s true,” at least as far as encouraging fiscal responsibility is concerned. “Consumer advocacy” should stand for making sure consumers get a fair deal, rather than deny them the option to do whatever the hell they want. Unfortunately, that’s what some groups intend to do, what with that new payday loan cap.
I talked to Marcelo, the guy behind the counter at the center down the street, and he was worried that they might have to close up, because their overall profit margins were thinner than the envelopes Wal-Mart benefits packages come in. So many people skip out on the loans they take that the higher fees are what they need to stay afloat, and they’d never get that money from most people even if they WERE as horrifying monsters as the media and advocates make them out to be (protip: they aren’t).
If we’d learned anything from the state of the economy, it’s that risk should levy appropriate costs. Hedge fund CEOs and the golden-parachute execs of the corporate fiascos this decade took such gigantic leaps because they had no personal investment in the moves they took. They’d make out well either way. Not the best of plans for folks who WEREN’T them. On the smaller scale, subprime borrowers are high-risk, and thus should be willing to shoulder higher fees. Credit unions, churches and the like are hawking alternatives to this “menace” but really, how much money and customers can they afford to carry? Can they shoulder the estimated 5 million that take out these loans in the name of public safety? Doubtful.
All that’s happening here is that people are going to lose another options, and the subprime sinks lower.
