First up, the Pennsylvania Supreme Court ruled that online payday lenders are not permitted to do business in the state without a license. And since licensed payday lenders can’t charge anywhere near what they need to operate profitably, no payday lending is allowed there at all.

This, of course, begs the question: what the heck are people in need of short-term credit going to do in Pennsylvania? They are now forced to borrow from a friend, relative, or employer — all of which have potential downsides as far as damaging those relationships; they probably don’t have access to a credit card for a cash advance or they wouldn’t have used PDLs in the first place; they have to rummage through their belongings to find something to pawn and risk not getting it back; or they have to bounce a check and incur overdraft fees that are at least three times more expensive that payday loans.

Has anyone in Pennsylvania figured out how bad an idea banning PDLs was in the first place? Did anyone consider what the people who use the loans want?

Meanwhile, dozens of newspapers picked up the story of the CRL’s bogus study. No media at all — except yours truly — picked up on the bogusness of the study itself. If you haven’t figured out yet that the media finds stories of alleged consumer “abuse” better reading than how many millions of consumers were helped, then you don’t want to believe in media bias.

After Ben Popken at Consumerist.org was duped by the CRL’s “study”, I challenged him to present the real story. Amazingly, despite sending him an Email, posting a public reply to his blog post, and posting a public message to him — he had no reply.

I challenged Daily News reporter Errol Morris on his article as well. Two Emails. No reply.

Do you think it’s because they won’t admit they’re wrong, or that they can’t admit they’re wrong?

Over in Delaware, the Governor signed a law required payday lenders to pay $1500 annually to help the state fund financial education classes and to advertise low-interest, community-based loans which compete with the product. Now I’m all for financial education classes. But why is it, exactly, that payday lenders are being forced by the government to pay for them? Last I heard, liquor stores aren’t forced to pay for AA meetings, McDonald’s isn’t required to pay for nutrition education, and strip joints aren’t required to pay for sex education (or dance lessons).

Delaware’s stupidity continues, as the government is pushing the LoansPlus product — same day loans of up to $500 at 15% APR and a “realistic payment plan”. They’re touting how great these loans are. Now, I’m all for competition, and so are lenders. Seeing as how this program has been in existence for 18 months and they’ve served a whopping 400 people, I think it’s safe to say that consumers have voted with their feet.

And in case that’s not clear enough — memo to Delaware: consumers obviously prefer payday loans!

This, of course, bodes well for Virginia. Gov. Kaine approved a loan program for state employees, who can borrow $500 at 25% APR for six months. Of course, they must take an online literacy course first, and can only get two loans per year. Memo to Virginia — oh, never mind. They’ll figure it out soon enough.

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