Jan, 2009
Legislators and interest groups who want to cap interest rates on short-term payday loans -- which would essentially ban the service -- ignore the increasing amount of constituents and hard-working consumers who are struggling to gain access to credit in today's economy. ("Payday lending bill set for fast track in S.C. House," Jan. 27).
Shutting down the short-term payday loan industry only forces these borrowers to resort to less-desirable and more-expensive alternatives to make ends meet.
Contrary to legislators' claims, a Dartmouth College study found that a 2007 ban on payday lending in Oregon hurt borrowers who were forced to turn to more expensive alternatives like bounced checks, overdrafts and credit card cash advances.
A recent New York Times Magazine article also noted that payday loans are a valuable financial tool offering easy-to-understand conditions, with "no surprises, no hidden fees" (unlike many banks, which are offering these same kinds of loans but without being demonized by media and political elites).
Source: Thetandd.com
