The Long Beach Press Telegram demonstrates the usual ignorance with regards to payday loans. Payday lenders no more â€œtargetâ€ low income neighborhoods than fast food chains â€œtargetâ€ truckers at exits on interstate highways. The Telegram perpetuates the already disproven myth that minorities take out more payday loans than non-minorities. They mention a â€œstudyâ€ that allegedly shows correlation between PDL borrowers who get loans and subsequently file for bankruptcy without ever citing the specific study by name.
They claim the rates are â€œextortionistâ€ without ever placing the flat fees charged in context with other forms of short-term credit, such as ODP/NSF fees, which are three times more expensive. This foolish editorial mentions that in states where PDLs have been banned, the CRL â€“ itself a dubious organization â€“ is a good thing, failing to mention that more than one real non-partisan study, which I cite here by name, says exactly the opposite. The Telegram also claims that â€œhundreds of commercial banks and credit unions offer similar small loans at reasonable ratesâ€.
This, of course, begs the question â€“ if those rates are better, why arenâ€™t borrowers rushing to those loans instead of payday loans? Because they are NOT widely available. If they were, competition would force out payday lenders, not needless legislation. Finally, they ask why Congress can limit loan rates to 36% for the military, but not for all Americans? Because the rate cap was a political move based on a report that never mentioned payday loans in any way.
Same question for the Telegram that I ask everyone else who calls for a ban: Give us specific examples of where people will get short-term credit. The options that do exist have already been discarded by borrowers as not being palatable to them.
Iâ€™ll reply to the loony editorial in the Montgomery Advertiser with a quote from another lender. â€œThere is clearly no way payday lenders can sensibly be blamed for the ills mentioned by the Alabama Poverty Project. There is also no way for a consumer to reach the much-hyped triple-digit interest rate mentioned in the column because a loan cannot be extended for a full year. It is unfair to judge short-term, two-week loans on an annual percentage basis. Other alternatives to payday lending do not stack up either. Not everyone can turn to a family or friend for an emergency loan. Credit cards, the solution touted by the Alabama Poverty Project, come with steep fees that far exceed the price of a payday loan.â€
Finally, I wrote to Ylan Q. Mui about her Washington Post story of October 13th, asking for clarification on some of her statements. No reply! What a shock. Donâ€™t you just love it when â€œjournalistsâ€ are caught with their pants down which, in Ms. Muiâ€™s case, appears to be the revelation that she completely fabricated copy in order to support her story.
Ylan Q. Mui â€“ liar, liar, pants on fire. The Post should fire her, and her pants.