I know, it’s not like they’ll suddenly see the error of their ways, but somebody has to keep an eye on them.

Rep. Gordon Hintz, widely known as The Job Killer of Wisconsin, flat-out lied to the face of Emily Mills, op-ed writer for the Isthmus. He told her, “Reports show that about 50% of borrowers aren’t able to pay it off in just two weeks, so then we’re not talking about a short-term loan anymore.”

I’d like to get a look at these alleged reports, and see the Pinnochio noses on its authors. Anyone who reads the annual SEC reports of payday lenders knows that 94% of all loans are paid back on time.

However, Emily Mills isn’t going to be let off here. She’s been sucked into an opinion by not doing her research. On her blog, she says, “as all too often borrowers are forced to roll over loans, thus accruing yet more interest, because they can’t fully pay off the first one by the time their next paycheck rolls around ” — a claim which I’ve just debunked.

And to it the overly-dramatic line, “we’re talking about preventing them from fleecing the ever living crap out of people in already dire financial straits–which they seem to think is their God-given right to do.”

Actually, Ms. Mills, nobody is being “fleeced”. Let us remind you that people take out loans of their own free will, where federal regulations require fee and APR disclosure, and where every study ever done has shown overwhelming satisfaction with payday loans. In addition, payday loans HELP people out of dire financial straits when they are used responsibly, which they are 94% of the time. I should hope that helping people get short-term credit on nothing more than a promise to repay is something that God would, in fact, be rather proud of.

You didn’t do your research, didja?

As for her support for credit union loan products, the payday loan industry has no problem with them. Competition is good for the marketplace. One wonders, however, why these products haven’t found wide acceptance. Maybe because not everyone who needs a short-term loan is a member. Or maybe they just prefer the convenience of a payday loan.

She continues, “We are few of us financial wizards, and when things get really tough, we often end up feeling like there are no alternatives. That has to change.” Ms. Mills, a 36% rate cap kills the payday loan alternative in Wisconsin. You force people to other forms of credit that they have already dismissed — borrowing from a friend, relative or employer; taking a credit card cash advance; pawning something; getting an internet loan; and bouncing a check.

Why would you do that?

In her blog comment section, she asks what level of cap would be reasonable? Ms. Mills, the free market already caps rates. If rates got to a point where borrowers decided they were too expensive, then they would not take out the loan. In Wisconsin, that rate happens to be about $20 per hundred borrowed. Maybe YOU don’t like that rate, but the customers aren’t walking away from that rate. They really don’t need your help shopping for a credit product, just like they don’t need your help shopping for a carton of milk.

But you DO realize that there is a certain rate that lenders must charge in order to remain profitable, right? Because you do understand that there are defaults that eat up a lot of profit, right?

More garbage from Ms. Mills: “The proliferation of payday-loan and check-cashing stores, plus the ever-rising number of people who find themselves in a spiral of debt because of them, are symptoms of our nation’s greater financial woes.”

On the contrary, the fact that so many PDL stores exist is a credit to this nation’s spirit of innovation. Prior to payday loans, Ms. Mills, people in need of short-term credit would bounce checks — incurring fees that are higher than those of payday loans. Furthermore, the “spiral of debt” myth is just that — only a tiny minority of people misuse the product in such a manner. It is incumbent upon them to ask their lender for a payment plan, which all CFSA Trade Association Members must offer.

As for check-cashers, the reason they exist is because not everyone wants a bank account. People don’t trust banks — and we see why now, don’t we? Oh, it isn’t just the subprime, exotic mortgages that cratered this nation’s economy. They don’t trust banks because of their hidden fees — fees which payday lenders disclose openly. The fact that Ms. Mills is crazy enough to say, “Beyond proper regulation, we need to start educating vulnerable populations about using more reputable providers like banks and credit unions”, seals my argument that she has not done her research. She’s calling the banks “reputable”? Didn’t I just get through reminding us who caused our financial crisis?

I’ve got news for Ms. Mills, these “reputable” providers are only NOW getting INTO payday loans (Wells Fargo, US Bank, and Fifth Third are offering them now). Maybe it’s because the public got wind of the Nov. 2008 FDIC report that showed banks make almost all their money from overdraft and NSF fees — products that carry higher costs than payday loans.

And finally, I have to correct her on other thing. The 36% rate cap isn’t an issue because of loan term. They’re an issue because that translates to $1.38 in revenue per hundred borrowed. If you’ve done your research, you know a payday lender needs $15 per hundred to even survive.

Finally, we have Dave Zweifel babbling on about the industry hiring lobbyists to protect profits. I should hope so! As companies with a fiduciary duty to shareholders, they must do something to stop The Job Killer from removing this credit option from consumers and killing jobs.

Lobbyists exist to educate legislators and, in this case, save the 3,500 jobs that Job Killer Hintz wants disposed of. The only person here who doesn’t seem to actually care about people in Hintz himself. Otherwise, he wouldn’t be lying to Emily Mills.

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