Josh Kalven blogs over at Any time you see the word “progress”
in a website name, chances are it’s a haven for those uneducated about payday loans, or just plain ideologues who don’t let the facts get in the way of their rigid position.

Klaven rambles on incessantly about the alleged evils of payday loans, so it’s time to call him to task. I know, I know. It’s a fruitless effort, but I’ll do what I always do — offer him the chance to dialogue here with an unedited column; offer to fund any short-term credit solution he invents that serves the needs of customers and allows lenders to actually make a profit; or (more likely) post the article and never hear from him. Payday loan opponents are all the same — 99% run for cover when the facts hit them in the face.

Okay, Josh, here it comes. Get your hiding place spruced up.

There is a need for short-term credit in this country.

Options are limited, and payday loans (and installment loans) are neither the most nor least expensive.

A) Borrow from friend/relative/employer

Cost: Zero

Risk: Complication of important relationship, embarrassment

B) Credit Card Cash Advance 

Cost: About $1 per hundred every two weeks

Risk: Fail to pay; credit rating is damaged

C) Pawn something

Cost: $9.50 per hundred every two weeks

Risk: Fail to pay, you lose the personal item.

D) Payday/Installment Loan

Cost: Averages $16 per hundred every two weeks

Risk: A collection agent tries to recover what’s owed; no damage to credit rating; no personal item at risk; no personal relationship at stake. 

Myth: “Cycle of Debt” – 94% of loans are paid back on time — that statistic is available in every single SEC filing of all public companies.

E) Online Payday Loan

Cost: $25 – 30 per hundred borrowed every two weeks

Risk: Same as regular payday loan, but industry is unregulated and identity theft is easier.

F) Bounce a check

Cost: Averages $45 per hundred borrowed

Risk: As soon as you bounce one check, you risk creating a domino effect, causing other checks to bounce and running those fees even higher.

Even though you may think the rates charged constitute usury, you are wrong, because you are too quick to make judgments without understanding what you are talking about.

Josh, see if you can understand exactly WHY a 36% rate cap puts lenders out of business:

If you put them out of business, as you desire, you FORCE consumers to the other choices above.

So, Josh, what if they don’t have anything to pawn? Don’t have a credit card? Don’t want or cannot borrow from friend or relative?



Is demand just going to vanish?

Are you going to make a stupid comment like another poultry (read: debate chicken) Dr. Stephen Graves, that people should “just do without”? You know, do without fixing their car, going to the doctor, those kinds of things.

Or are you just another blabbermouth in favor of government paternalism?

If you want to blog, then accept responsibility for what you say.

What you are saying is both wrong, and harms the people you want to help.

Don’t you get it, Josh?


As someone once said, ‘Those that want a rate cap don’t get harmed by a rate cap”.

So instead of rambling on about public policy on an issue of which you are clearly ignorant, or approach from an untenable ideological position, do us a favor and respnd when challenged.

Otherwise, I am welcome to lump you in with all the rest.

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