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.

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.

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.

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.