To The Editor:
Dick Conville’s op-ed (“Payday Loans Don’t Serve Those in Needâ€, 10/22) omits important points regarding payday loans, which is typical of those who have never actually used the product. He postulates a minimum wage worker earning $1,160 monthly taking out a $500 loan. This would never occur, as payday lenders limit loans to 25% of gross monthly income. Thus the hypothetical customer would only be permitted a loan of $290. Mr. Conville thus reaches a faulty conclusion that the borrower is “trapped†in a loan he cannot repay. And of course, Mr. Conville omits the fact that the borrower might actually have the mental capacity to plan ahead, and know how much he can borrow and be able to repay. Indeed, 94% of all loans are repaid on time, as evidenced by the SEC filings of publicly held payday loan companies.
The grander conclusion that payday loans do not serve those in need is also faulty, as evidenced by the fact that the product has been in existence for 22 years, and is used by 12 million people annually. A George Mason University survey also demonstrated a product satisfaction rate of 90%.
If Mr. Conville really wants to know if payday loans help folks, then he should pay a visit to that new payday loan store he spotted and talk to the consumers. He’ll be surprised.
Sincerely,
Lawrence Meyers
3 users commented in " Letter to the Hattiesburg American re: Payday Loans "
Follow-up comment rss or Leave a TrackbackIts not just that Mr. Conville got his facts wrong but failed to point out the true reasons that people have to turn to payday loans and similar unsecured short-term loans just to meet basic, daily needs – and that has to do with this poor economy. If they really want to stop payday loans – fix the economy and take away the need to use these loans.
Today, consumers have very limited options when they are unable to make ends meet between paychecks: bank overdraft fees ($27 or 704 APR), late credit card payment fees ($29 or 757 APR), or non-sufficient fund and merchant fees on a bounced check ($51 or 1,329 APR).
A short-term (or payday) loan (typically $17 per $100 loaned for two weeks) provides them with a cost effective and less credit-damaging option.
Instead of limiting consumers access to credit, financial service providers, consumer advocates and lawmakers should work together to expand viable credit options for hard working folks.
Payday loans may not be the right choice for everyone, but restricting consumer choice will not stop families from needing access to cash between paychecks; it will only make it harder for them to weather life’s storms.
This has happen to me a $30.00 check was debt from my checking account on 04/30/2013. How can I get this money back.
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