No Reason to Bring Payday Loans Back

Sunday, March 3, 2013

M oore County residents have at least a couple of reasons to be surprised - they should be appalled - by the suddenly surfaced effort to revive the infamous payday loan industry in North Carolina.

For one thing, this misguided and unsavory campaign is being sponsored by one of our own. Actually, let's rephrase that. Though state Sen. Jerry Tillman represents our county, among others, he is not really one of us, hailing instead from up Archdale way. This is all the more reason to elect somebody else next time around - someone who is from here and shows more evidence of sharing our values.

There's another reason for local concern: If the payday loan snake is allowed to slither back out from under its rock, among its most hard-hit victims are likely to be Fort Bragg personnel and their families.

In 2007, indeed, Congress enacted - and President George W. Bush signed - the Military Lending Act, which put certain controls on loans to members of the armed forces. Since its passage, the number of such members seeking counseling for crippling debt is said to have shrunk dramatically.

Preying on the Vulnerable

But the military has enjoyed even greater protections in our state. Years before the feds did that, back in 2001, North Carolina had already taken more stringent steps to outlaw payday loans within our state's borders, at least in theory. In reality, it took several more years to stamp out the predatory little loan shark offices that had sprung up everywhere, with a special concentration in places like the sleazy neighborhoods crowding in on military bases. It took a 2005 state court decision to drive a stake through the industry's heart.

It is that ban that, for no valid reason we can think of, may now be lifted.

Payday loan schemes seek to prey on the most vulnerable in our midst by ensnaring them in loan upon revolving loan until they're hopelessly mired in debt. In the past, investigations showed that some North Carolinians ended up paying as much as $8,000 in fees on a loan that originally totaled $200.

Tillman claims that the new payday loan industry, if there is to be one, will be kinder and gentler and less voracious in the usury it inflicts on its victims. We'll believe that when we see it. The step he proposes seems certain to create far more problems than it solves.

'The Same Rip-Off'

The baseball-capped Tillman has struck us from the beginning as singularly ill-equipped for the state Senate position he now holds, and this does little to assuage such doubts. Tillman portrays his sponsorship of this proposed legislation as somehow being an example of looking out for the little guy, those with bad credit and nowhere else to turn.

But it seems more a matter of a legislative newcomer falling victim to the blandishments of a half-dozen lobbyists, the most powerful of whom is former state House Speaker Harold Brubaker, who is now pandering to well-heeled corporate vampires out to suck blood from the most helpless among us.

N.C. Attorney General Roy Cooper said it right: "This is the same rip-off we ran out of our state years ago. ... Payday lending was a bad idea then, and it's a bad idea now."

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JimHeim 2 months, 2 weeks ago

Our men and women in uniform are lucky have Congress to protect them from these heartless loan sharks. The working poor in North Carolina seem to have no one on their side. To our Republican legislature there's nothing so bad about poverty that they can't make it worse.

How could Tillman possibly think this bill is a good idea? Who does he represent, anyway?

PBinNC 2 months, 2 weeks ago

Tillman unfortunately had no opposition in the general election. I didn't vote for him. He is a clone of Harris Blake, as far as I am concerned. Who brought the first fracking bill to the legislature? Harris Blake. Then Tillman brings this bill. Neither do anything good for the people of North Carolina, but I can't help but think that they are doing some good for the legislators who back them.

iPayday_mobi 2 months, 2 weeks ago

Local payday loans are old hat anyway, it is much easier to get one online from sites like ipayday.mobi and Where Can I Get A Payday Loan. The application is fast and the money is direct deposited. NC, you have nothing to worry about.

Thanks

fairyt 2 months, 2 weeks ago

I don't doubt that some people look to these loans to bail out their over spending habits, but truly some people look to these loans for the short term use for emergencies. As long as the consumer's demand for these type of services, the payday loan lenders will be there to supply the needed service, that consumers are demanding. The world revolves around supply and demand. I wish our economy would straighten up and supply those who need jobs the opportunity to thrive again. I think a big mistake was bailing out banks, do you see the government bailing out payday lenders? No! So, If the big Banks want to risk providing these payday loans, then they need to assume the loses along with the risk they are taking, to do so.

JimHeim 2 months, 2 weeks ago

fairyt - The problem with these loans is much the same as depending on a lottery win. No matter how you work it, you'll be worse off than before.

Maybe we could reform the process to require the same sort of creditworthiness as for a car or home loan. Wasn't one of the problems with sub-prime home loans a lack of ability to repay?

Bear in mind that payday loan companies are grifters. Like the loan sharks they so closely resemble, they depend on the borrower's inability to repay to snowball the original loan into a disaster to the borrower, throwing the whole family into crises. I don't see an upside to that.

DingoMike 2 months, 2 weeks ago

Loans are proof positive that the stupid should not reproduce. Can anyone say 200% interest, so to the educated mind this seems like a good idea??? Anybody that takes out one of these loans needs to lose all public support and lose the ability to have children.

JimHeim 2 months, 2 weeks ago

DingoMike - How fortunate for you that you are not poor. Most of those who are are in that condition because they were born poor. This country makes it particularly difficult for the poor to better there position in society.

Just as the desperately ill frequently resort to unproven, often dangerous quack remedies, so too do the poor grasp at straws to survive. Pay day loans and lottery tickets are just two of the ways that the poor make things worse. But we've limited their choices.

Our tax system works against them. Banks rip them off every day. Every economic crash leaves them worse off and they are the least likely to recover.

You may smugly disrespect them, but until you've faced the problems they have, your disdain is shameful.

emb6683 2 months, 2 weeks ago

Our tax system works against them? Howso? They don't pay income tax, in fact earned income credit gives them money back from someone else. And I don't believe they pay sales tax on food stamps. What else is there?

DingoMike 2 months, 2 weeks ago

JimHeim, I am one of the poor down trodden that you speak for so piously. My income is BELOW the national average, and I buy lotto tickets when the jack pot is over 100 million and have NEVER taken out a loan that I did not have the means to repay. You see how a family can live within their means. What is shameful to me are those idiots that spend more then they make and expect to have their debt erased because "I'm poor because the system is stacked against me" The choice to spend monies that the poor don't have is theirs to make, no one else's. Man up and pay what you owe, and don't spend more then you can pay back. This concept is not rocket science. Excuses don't make the world go round, but hard work does.!!!!!