Josh Kalven blogs over at ProgressIllinois.com. Any time you see the word “progress”
in a website name, chances are it’s a haven for those uneducated about payday loans, or just plain ideologues who don’t let the facts get in the way of their rigid position.
Klaven rambles on incessantly about the alleged evils of payday loans, so it’s time to call him to task. I know, I know. It’s a fruitless effort, but I’ll do what I always do — offer him the chance to dialogue here with an unedited column; offer to fund any short-term credit solution he invents that serves the needs of customers and allows lenders to actually make a profit; or (more likely) post the article and never hear from him. Payday loan opponents are all the same — 99% run for cover when the facts hit them in the face.
Okay, Josh, here it comes. Get your hiding place spruced up.
There is a need for short-term credit in this country.
Options are limited, and payday loans (and installment loans) are neither the most nor least expensive.
A) Borrow from friend/relative/employer
Cost: Zero
Risk: Complication of important relationship, embarrassment
B) Credit Card Cash Advance
Cost: About $1 per hundred every two weeks
Risk: Fail to pay; credit rating is damaged
C) Pawn something
Cost: $9.50 per hundred every two weeks
Risk: Fail to pay, you lose the personal item.
D) Payday/Installment Loan
Cost: Averages $16 per hundred every two weeks
Risk: A collection agent tries to recover what’s owed; no damage to credit rating; no personal item at risk; no personal relationship at stake.
Myth: “Cycle of Debt” - 94% of loans are paid back on time — that statistic is available in every single SEC filing of all public companies.
E) Online Payday Loan
Cost: $25 – 30 per hundred borrowed every two weeks
Risk: Same as regular payday loan, but industry is unregulated and identity theft is easier.
F) Bounce a check
Cost: Averages $45 per hundred borrowed
Risk: As soon as you bounce one check, you risk creating a domino effect, causing other checks to bounce and running those fees even higher.
Even though you may think the rates charged constitute usury, you are wrong, because you are too quick to make judgments without understanding what you are talking about.
Josh, see if you can understand exactly WHY a 36% rate cap puts lenders out of business:
If you put them out of business, as you desire, you FORCE consumers to the other choices above.
So, Josh, what if they don’t have anything to pawn? Don’t have a credit card? Don’t want or cannot borrow from friend or relative?
Well?
WELL?
Is demand just going to vanish?
Are you going to make a stupid comment like another poultry (read: debate chicken) Dr. Stephen Graves, that people should “just do without”? You know, do without fixing their car, going to the doctor, those kinds of things.
Or are you just another blabbermouth in favor of government paternalism?
If you want to blog, then accept responsibility for what you say.
What you are saying is both wrong, and harms the people you want to help.
Don’t you get it, Josh?
YOUR SOLUTION HURTS THE PEOPLE YOU ARE TRYING TO HELP!
As someone once said, ‘Those that want a rate cap don’t get harmed by a rate cap”.
So instead of rambling on about public policy on an issue of which you are clearly ignorant, or approach from an untenable ideological position, do us a favor and respnd when challenged.
Otherwise, I am welcome to lump you in with all the rest.
(7 votes, average: 3.86 out of 5)
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8 users commented in " Payday Loans: Calling Out Josh Kalven "
Follow-up comment rss or Leave a TrackbackRegulating the industry would only hurt the consumer. Payday lending is often the cheapest loan option because they only need quick loans to live between paydays. We do not want to force consumers into other alternatives that either cost more or carry more damaging risks than the low fee of payday lending.
I can see reasonable regulation of payday lending but not the type the do gooders who don’t use the service want to do! They only want to see this industry gone. And that only hurts those that need it most. No one wins when options dry up!
Lawrence, I totally agree with the points you make. The breakdown of options you give are insightful.
People, like Josh, don’t even want to listen to it. They think that they are “good” and people that do not agree with them are “bad”. The facts never surface with his articles. He’s just taking the moral high ground all the time.
I’ll also add that I try and leave multiple posts on Josh’s Progress Illinois site articles and he blocks all of them. He’s a total censor. If you’re going to bash something, at the very least allow the other half to have their say.
Yes, PDL Blog, Kalven is not only a coward, but the worst kind of blogger — a censor.
It’s the kind of shameful behavior that makes one wonder why he’s even given a voice.
Still hasn’t responded to me, by the way.
First, I’d like to address the “censor” accusation. If you look over our entire archive of payday-loan-related coverage, you’ll see that we’ve posted countless comments defending the industry:
http://www.progressillinois.com/taxonomy/term/260
PDL, if your post was blocked or unpublished, it’s because you violated our comments policy in one way or another. You weren’t “censored.”
Second, I take issue with the idea that I’m uneducated about how payday loans work. I’ve studied them closely and acknowledge that they can be a useful tool for certain consumers in certain situations. But I also believe that their impact as a whole represents a net negative.
I’m not looking at this issue in a vacuum either. I view these types of financial products as the extreme byproduct of the decision in the late 70s to lift the cap on U.S. interest rates. That shift has gradually caused great destruction in the decades since (see the mortgage crisis). Payday loans represent just one element of the larger problem.
I’d like to see the U.S. banking system return to the days when we lent money based on one’s ability to repay, rather than models that take advantage of desperation or financial inexperience. I don’t believe that credit should be available to anyone and everyone. Until 30 years ago, neither did most banks and lenders in this country.
That being said, I agree that bounced check penalties and credit card cash advance fees are equally pernicious. I believe those institutions should be better regulated as well.
Finally, if “intellectual honesty” is the issue here, Mr. Meyers should probably disclose his professional connections to the industry when writing on the topic:
http://www.bloggernews.net/115609
It strikes me as interesting that so many of those I see defending the payday loan industry online are benefiting personally from it.
And readers can check out my reply here:
http://www.bloggernews.net/121368
@ Josh, Linda Deforge has written articles on Progress Illinois and she allowed my comments. I give her a lot of credit.
You, on the other hand, find any reason not to publish comments that question any point you bring up in your posts.
You are a censor. Some idiot leaves a completely slanderous comment about the industry and you allow it, but God forbid it contradicts what you’re saying.
As far as Lawrence being in the industry. Why is that a bad thing?
Your arguments are always valid, relevant and well thought out. Studies continue to show that short-term loans, when used responsibly, do more good than harm and allow individuals to remain in good standing with their creditors. Those who oppose the industry are extremely inconsistent with their reasons for wanting to lower the interest rate in such a manner that it will disable the entire industry. In addition, when a reason is given, there is hardly ever concrete evidence to prove their position.
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