Loans Thrive in Loopholes
Tuesday, April 2nd, 2013
Certain products – cigarettes, medicines, booze, mortgages – are so prone to abuse that society has a clear obligation to regulate them. Government and industry rules govern their sale and purchase, their advertisement, even their use.
Since long before cigarettes were restricted to buyers 18 or older, the basic regulation of such products has been a given in America. Food safety, to pick another example, has for decades been the subject of rules imposed on farmers, processors and restaurateurs.
Despite new evidence of the abuse inherent in the short-term loan industry, that business remains rigorously protected by its friends at the federal level and in Richmond.
A report this year from the Pew Charitable Trusts makes the potential for abuse clear: 58 percent of payday borrowers can’t meet their monthly payment half the time.
Seventy-eight percent of borrowers rely on lenders for information about the loan, the equivalent of depending on liquor companies to explain the dangers of alcoholism.
Published: April 2, 2013