I’ve been doing some research into Texas Appleseed. It looks to me like a pretty good organization that helps kids and families.  Unfortunately, one of its employees is making some illogical statements about payday loans.  Honestly, I sometimes wonder if every state should require a class in basic logic given how often logic seems to fail opponents of payday loans.

The editorial in the Houston Chronicle makes one good point, but the rest literally make no sense.  The author, Mark Wawro, tells the tale of a woman who got involved with what sounds like a bad lender.  When she complained, this lender apparently only offered to lend her more money.  Bad players need to be run out of business.  On that, we agree.

Wawro says the industry gets a bad rap because it “extracted” a billion dollars in fees from Texans.  Why do opponents use this term?  It implies that somebody had money taken away from them.  In fact, the people get credit in return, which is spent on something they need.

35,000 people had cars repossessed.  That’s because they didn’t live up to the terms of a legal contract.  It’s unfortunate, but why is the lender catching flak when it is the responsibility of the borrower to make sure they can pay on a loan BEFORE they take it out?

Texans pay more for payday loans than in other states?  So what?  That’s what the market bears.  Things cost different amounts in different places. Gas costs more out west than it does here.  Cigarettes cost more in some states than others.  I think Wawro wants the government to intrude on the market here.  If people thought the loans were too expensive, they wouldn’t use them.  For Heaven’s sake, Wawro is a lawyer.  Where are his logical skills?  Economic skills?

Lenders are not using loopholes to make loans.  The loans are being offered within the law in the state of Texas.  As a lawyer, he should know this is a frivolous argument.

He claims loans are loaded with hidden costs and excessive fees.  That’s not true.  Has he seen the state’s required disclosure documents?  They can literally be understood by a fifth grader.

He asks these questions:  What kind of credit market do Texans want? One that crosses the line of “usury” by charging exorbitant interest and fees? Or one that meets the needs of our working families with fair, transparent terms that are good for business – and good for Texas.

The loans are not usurious.  They are in line with state law.  If they were usurious, they would be illegal.  They are not illegal, and thus cannot be illegal.

Wawro is the one who claims the fees are exorbitant.  Customers aren’t complaining.  If the fees were too high, they wouldn’t use these loans.

The terms are, like I said earlier, totally transparent.

It seems to me that Wawro needs a class in logic and a class in economics. However, he seems to do just fine in making emotional arguments that have nothing to do with how things are really working.

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