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| "The Rights of Man" |
".... I object to wealth achieved through the misery and misfortune of others."
- Thomas Paine (1774)
Mr. Paine was commenting on the institution of slavery in America at that time; but it is little different - and equally inhuman - to steal a life, to break a spirit, to victimize and debase a person through the "paper chains" of financial servitude.
A: Who would knowingly give up their freedom and humanity to a usurer, to a thief?
A: Who would knowingly give up their freedom and humanity to a usurer, to a thief?
Payday lending - creating a Nation of indentured debtors.
7 comments:
If credit unions were doing the job, the ability for Payday Lenders to succeed would significantly reduced. The fact that lenders that exploit have moved their offices from Lombard Street to Main Street is evidence that something is not working in the credit union industry.
Guess it is kind of difficult to see the problem when you are busy working your CRM to find as many A/B level members as possible.
The problem is not going to change until credit unions change.
It ought to be clear to everyone that their apparently was a need for a product like a payday loan. The ability to get money fast without a lot of hassle when you need it. Not rocket science but certainly bordering on genius considering the profits that have been made.
Traditional lenders like credit unions and banks for years ignored the payday lenders either thinking they would go away or hoping government regulation would put them out of business. Neither has happened. Admittedly there have many states that have banned them but them have been able to succeed in others by adjusting their product to conform to changes in the law.
Campaigns to convince those in need of money to come into their bank or credit union have not worked. People do not want to spend an hour answering questions about their finances just to borrow a few hundred dollars. And who wants the institution that carries their home or car loan to know that they are struggling financially. Probably fear that they will be placed on some type of watch list and have their credit checked every week.
So what is the solution to help people when they need it and prevent them from getting in the habit of using payday lenders? There may not be one.
Easy money fast is a great sell. Unless traditional lenders can find a way to provide that to not only their customers or members but also the millions of non-banked people, payday lenders are here to stay.
Do not look to your government to solve your problem by banning the business. People need money to pay bills, feed their kids and have respect.
People helping people. Great idea. Make it work.
While I think credit unions should do more to offer such "Payday Alternative" loans, as well as alternatives to predatory consumer loans, such as car title loans - credit unions (unless significantly subsidized) cannot spend money to be make such loans as "convenient" as the predatory lenders - not can credit unions absorb the same loan loss levels as the predatory lenders. If a federal credit union's interest rates are capped at 18% (with the narrow exception of a few at 28%), it is a very unfair playing field when the predatory lenders can charge ten times that much.
You can lead a horse to water, but you can't make him drink.
Our CU had a simple 12% APR payday loan, but cancelled program after 3 years. We tired of trying to break the payday lending cycle consumers freely choose.
The financial dumbing-down of America is a result of government always trying to do more for the consumer. I wish Elizabeth Warren understood this basic fact.
Liz Warren is not the problem She is trying to solve the problem. The shysters are the problem and Credit Unions should be on the side of the people trying to solve the problem of shysters who are providing misery for the less fortunate among us. Make any excuse you want for any discomfort you may suffer as a consequence of her efforts but it had to be done. She's taking on Dimon and the rest of his cronies to slow or stop them from doing it to us again. She needs help not denial that it happened.
Credit unions making payday loan alternatives have done what they can given their situation. We've seen it help many members out of the bind.
However, before we jump all over the woes of "payday everything", don't you think a few cu's need to apologize for their courtesy pay/overdraft practices. Far more damage has been done to members of modest means through this helpful product than anything payday loans will approach.
Elizabeth Warren is a greater threat than any Banker. Misguided fools like Ms. Warren always believe that a regulation can solve a problem. Only less will be available to people of modest means if Ms. Warren has her way. Mr. Dimon has helped create a lot wealth. Questioning his integrity is totally inappropriate.
FYI: Credit unions were a large part of the problem during the last bubble. They enjoyed the income they got from questionable investments that they purchased. Americans were part of the problem because the mistakenly believed that purchasing McMansions was a silver bullet to never ending concerns about having to work for financial security.
I believe in credit unions and I believe in banks. Making misguided accusations about banks or bankers does not improve the world.
It is high time we stopped making complaints about boogiemen and start to ask the most important question and that is: "What are the problems and how can I be part of the solution?"
Elizabeth Warren will only make your job more difficult. I wonder how much value Ms. Warren gives to student who borrows money to pay her $400,000 salary for one course. The poor students would do better to invest in JPM than to have a student loan for taking a course from Ms. Warren.
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