Originally published at: http://boingboing.net/2016/09/15/support-the-consumer-financial.html
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You can’t legislate stupid people into becoming smart people.
Like “predatory real estate loans” it isn’t as though these places drag people in and make them sign bad loans with threats of force if they do not.
Stupid or ignorant people will continue to do stupid or ignorant things no matter how hard you try to protect them. Eventually you get a a nanny state where everyone is presumed to be incapable of caring for themselves and who have been taught to rely on Mommie Government so much they can no longer function on their own.
Maybe change society so taking responsibility for your actions isn’t considered a negative option and get people better education. There will be an irreducible core of fools no matter what steps are taken though.
It doesn’t turn them into smart people. It simply states that the lender has a responsibility to ensure that the people they lend to have the means to pay back the money they lend out. So there’s probably plenty of loopholes for payday lenders to continue their legalized usury even if this legislation passes.
The real solution is better bankruptcy law that allows people to escape perpetual debt. You can bet that lenders would take who they lend to more seriously if they could instantly lose money on it. You wouldn’t need a special law to force them; they’d do it on their own.
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Yeah, why regulate anything? Lead paint? Sure, kids love wall candy! Tainted peanut butter? You should have known better than to buy something without testing it for e. coli yourself! Federal safety standards for cars are just getting in the way of Detroit’s ability to innovate! Who needs the Clean Water Act, Lake Erie was way better when it was on fire! Why charge 1400% interest on a cash advance loan? Why raise the price of an EpiPen by 600% in less than 10 years? Why create 2 million fraudulent accounts and collect fees when your money-shuffling scheme causes someone’s mortgage payment to overdraft their account? Because nobody’s stopping them.
Business does not operate in the best interests of society. They exist to make money. It is society’s (and therefore government’s) responsibility to ensure that businesses behave themselves, and punish them when their actions harm others. Payday lenders don’t have to force anyone to take out a loan with 1400% interest to buy gas to get to work before their next paycheck, they just need to exist in the space created between shitty wages and increasing costs of living to exploit anyone desperate enough to be looking for help. People make bad decisions under stress, and that’s not something that “more education” can easily fix; it’s how our brains work.
It’s weird. “Businesses don’t care about you, they exist to make money” is the first thing anyone says whenever someone expresses surprise or confusion when a business does something bad, like it’s justification for them being allowed to do whatever they want. Yet when we try to regulate their excesses and abuses, suddenly businesses are the purest of souls, guided by the Benevolent Hand of the Free Market, and would never do anything that might jeopardize long-term good in the name of short-term profit, and the problem clearly lies with the victims of the business’s actions for not knowing better, but you can’t fix stupid so what’re you gonna do?
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Usually people who use this term are unknowingly (or worse, knowingly) relying on an incredible number of advances and luxuries that government has originated, supported, and paid for. If you want to remove the things you dislike from the function of government, you don’t get to keep all the goodies it’s given you. Like the internet, for example.
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I am all for free market and yadda yadda. I see payday lending like I do snake oil salesman. It is fraud and payday loans is basically a legalized con game. Yes, you’re right, smarter people shouldn’t fall for it, but desperate people fall for cons all the time. Steve Jobs even postponed standard cancer treatment for alternative routes.
Have you ever looked into what pawn shops charge for interest? It is minuscule in comparison. The rates on these short term loans are fucking criminal.
As for my advice on anyone who feels the need to use a payday loan - don’t. Default on what ever it is. Arrange something with that debtor. The outrageous percentage rates are outrageous and you are trading one problem for probably a bigger one.
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Payday lenders thrive in places legitimate banks will not set up shop. Banks won’t set up shop in these areas because racism. Payday lenders are usurious vultures filling a void. The one thing their victims have in common is lack of prior economic means. Calling them stupid or ignorant is equally ignorant. It’s not possible to use services that aren’t walking or bussing distance away if you’re poor enough that you choose a roof over your head over owning a car, because you only get paid enough to choose one.
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People have some really peculiar ideas of how laws work.
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