Payday Moans

Wallyhood has generally played the booster for businesses in Wallingford (with the exception of the Erotic Bakery, which was flat out and unnecessarily rude to us, and which also makes lousy tasting cakes). Hey, we even saw some good in condo development.

Our good will does not extend to Pay Day Loans. It is an embarrassment and a blight on the neighborhood. This company and companies like it prey on the least fortunate, charging usurious rates (391% APR!) to those who can least afford it and whose math skills least prepare them to understand exactly how they’re being robbed. As the customer-victims sink deeper underwater, Pay Day Loans is only too glad to pile on more debt and siphon off their hope of solvency if it means bigger yachts for their executives.

I can’t believe we allow that kind of immoral filth in our neighborhood.

And so we are grateful to Wallyhood tipster Andrew for alerting us to something we can do about it this coming Tuesday. The Poverty Action Network wrote its volunteers:

On February 10th, there will likely be a hearing featuring all legislation concerning predatory lending. Next Tuesday (the 3rd), we’ll be phone-banking to mobilize our members to contact their lawmakers or come personally with us to Olympia to show their support for legislation that would curb predatory payday lending. We provide the lists, the scripts, and the phones, and you provide your energetic phone skills!

When: Tuesday, February 3rd
Time: 5:30 PM – 8PM
Where: Poverty Action Office (1501 N 45th St, at Woodlawn)

They ask that you RSVP to [email protected] or 206.694.6794.

After you’ve RSVP’ed give a visit to the Predatory Lending Association web site, a sharp, satiric take on the issue produced by Wallingford’s own Matt Lerner of FrontSeat.org.

  • PaydayLendingRep

    While critics of the industry assign labels to payday lending customers in an attempt to further their political agendas, the fact is that we provide services to a broad cross section of Americans because there is widespread demand for the financial service we provide. Our customers represent a large demographic segment and cannot be grouped based on race, sex or religion.

    The only way to reach the much-hyped triple digit APR is to take out one advance and continue to renew the same advance every two weeks for an entire year. State laws and industry best practices do not allow this to happen. Believe it or not, payday advance compares favorably to many consumer alternatives, even when expressed as annual percentage rates for two-week terms: $100 payday advance with $15 fee is 391% APR.; $100 bounced check with $55.59 NSF/merchant fee is 1449% APR; $100 credit card balance with $37 late fee is 965% APR; a $100 utility bill with $46.16 late/reconnect fees is 1203% APR; a $100 off-shore Internet payday advance with $25 fee is 651.79% APR; $29 overdraft protection fee on $100 is 755%.

    There are efforts to cap the annual interest rate of a payday loan at 36% APR, meaning the total fee charged on a $100, two-week advance would be $1.38. Payday advance lenders could not cover the cost of originating a loan, let alone meeting employee payroll and benefits and other fixed business expenses.

  • http://www.predatoryass.com Matt

    I agree, criticizing the payday lending industry is criticizing the free market. I found this great website that debunks common myths about payday lenders:

    http://www.predatoryass.com

    Even the Pentagon is on the attack against payday lenders. They capped payday loans to the military at 36% because they said payday loans were one of top issues affecting the combat readiness of our troops.

  • http://n/a Josh

    I have another idea for a great payday-style business that would work well in the Northwest. This idea is also good for folks like me because the financial stuff is over my head.

    My idea involves digging pits near hiking trails and waiting for hikers to fall into them. Then I would come over and offer them valuable short-term services such as water, food, blankets, ropes, etc., at rates consistent with free market supply and demand.

  • Ryan

    Wow, arent we judgmental these days, I dont see the good folks at Wallyhood lining up to give folks with bad credit any loans. It must be nice being able to afford to pay cash for everything in your life and making it more difficult for those who can’t. Immoral is all relative brother.

  • http://www.wallyhood.org Wallyhood

    Actually, I’ve loaned and given friends in need money and other necessities on many occasions. When I do, I don’t burden them with crushing, inescapable debt.

    The US military determined that PayDay loans and their ilk were one of the top threats to our nation’s combat readiness, because it was undermining the well-being of soldiers.

    Servicing the debt from a single loan forces people to take out more loans, creating a spiral of debt. I’m comfortable in my judgement.

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