WSJ Shills for Payday-Lending Industry
From a laughable Monday subscription-only editorial:
But if payday lending is such a consumer rip off, no one has explained why these stores have become so popular. There are some 25,000 payday stores across America, and in many small towns the payday loan store is now as commonplace as the local post office. It has become something like a $6 billion industry serving 15 million people every month.
Critics complain that the annual percentage rate (APR) on a two-week loan of $100 with a $15 fee amounts to a predatory 390%. But the equivalent APR cost to the borrower of writing a bounced check can exceed 1,300%, while a credit card late fee charge can reach 700%.
So to justify ridiculous payday lending charges, the Journal compares the interest rate on a loan to the costs of making various mistakes. That’s about as desperate as an argument can get.
Payday lending has gone mainstream with probably most of the major banks either having a subsidiary in the finance business or looking for one. There’s too much money to be made from stupid people.
Comment by dave — April 6, 2007 @ 10:34 am