Biased Reporting on Payday Loans
Wednesday, March 26th, 2008 By Marc KilmerIn an effort to capitalize on the news surrounding housing issues, anti-payday loan folks are trying to blame these loans for foreclosures. There is no evidence to support the notion that “more people are turning to short-term loans with sky-high interest rates just to get by,” though.
Unfortunately, the biased reporter responsible for this piece fails to let the fact that “figures are hard to come by” dissuade him from quoting a variety of biased “experts” to support his unfounded thesis. Of course, these “experts” fail to educate the reporter on basic facts, such as that the interest rate on these loans (in Ohio at least) is 15%, not 800% as he claims.
The story also unintentionally illustrates the fact that these loans aren’t causing problems for lenders. People who are having financial problems turn to these loans, but to think that eliminating them will solve borrowers’ problems is ridiculous. For instance, it talks about a woman who took a payday loan because she couldn’t afford her mortgage payment. She could not repay the loan (and an anti-loan lawyer advised her not to pay it — apparently that lawyer thinks that people should be able to break contracts whenever it suits them) and eventually had to sell her house. The fact that she had to sell her house was that she could not afford the mortgage, though. The payday loan did not cause this situation. Even without taking a payday loan this woman would have still been faced with a mortgage she could not afford.
But all this is lost on those who have a desire to tell other people how to live their lives. As one paternalistic professor puts it, payday loans are like ”‘handing a suicidal person a noose’ because many people can’t control their finances and end up mired in debt.” Yes, people are too stupid to run their own lives so they need wise professors telling them how to do it, right?
Unfortunately, this news story is all too typical of most on payday lending. They turn to left-wing experts who look down on the financial choices of others and ignore academic studies that actually discuss the realities of payday lending (see my report which discusses these studies here). Inaccurate information, politically-motivated propaganda, and misleading sob stories are par for the course. It’s too bad that some legislators react to this misleading “journalism” instead of the true facts about payday lenders and borrowers.
Tags: Regulation
May 21st, 2008 at 4:39 pm
This is just another way of the goverment interfering. Payday loans are not the problem. Bring in some decent paying jobs!!! Do something about the gas prices!!! Then you are helping. Here are people who want to work and you are just making the problem worse. Figures, the goverment is involved. That is usually the begining of the end for anything.
October 21st, 2008 at 5:32 am
In the classic novel, Brave New World, author Aldous Huxley issues a “warning” of what would happen if the government took complete control of our daily lives. First published in 1932, Huxley wrote the piece in speculation of how his hometown of London may look in the year 2540, pending the continuation of programs to end war, conflict, suffering, and antagonistic (aka: “free”) thought. In other words, it is what the world would look like if nobody could utilize their voice, or live how people today want to, free of the iron fist of the various levels of government. Many people criticized Huxley for this, his fifth and most well-known novel, upon its release and still do to this day. Controversy or not, several seeds have been planted in America, which have made for some frightening similarities to this classic piece of literature. Yes, the socialist and communist movements have been around for several generations in America, though it hasn’t taken such prevalence until this one. This is thanks, in no small part, to politicians who are trying to put so many things under the exclusive control of the government. In parts of Los Angeles, for example, crooked elected officials have passed restrictions on where fast food restaurants can set up new shops. Yes, that’s correct; the “man” is telling you that you can’t go get a hamburger in South Los Angeles, and you’re going to like it. But, what are worse are state and national politicians, who are trying to take away your access to fast and easy payday loans. This is because the politicians are just trying to muster up enough votes for office, so that they can further their own self-interests. Surely, action is needed to fight the government’s ever-tightening stranglehold on all of us. Post Courtesy of Personal Money StoreProfessional Blogging TeamFeed Back: 1-866-641-3406Home: http://personalmoneystore.com/NoFaxPaydayLoans.htmlBlog: http://personalmoneystore.com/moneyblog/