My Thoughts About This Article: Yes payday loans could be "bad" in fact this is actually the option...

1. Paying More For Payday Loans
My Thoughts About This Article:
Yes payday loans could be "bad" in fact this is actually the option that is only for most of US have. So
could you have them pay an insane rate of interest or rather the customer move without
temperature for that week? For me it's a robust phone but from the legal standpoint they're having
not a problem. Lawmakers are trying to crackdown on lenders.
What do you think is too much interest to pay on a loan? Twenty percent? Forty percent? One
hundred percent? Well, believe it or not, millions of Americans are taking out small loans at rates
that can reach 400 percent a year or more.
It may sound like loan sharking, but in most of America, it's perfectly legal, and part of a trend called
payday lending. As reports, payday stores are among the fastest growing financial services in
America -- now a $40 billion-a-year industry.
No doubt you've seen them. They're as common as convenience stores.
Ten years ago, they didn't exist. Now, there are more than 22,000. There are more payday stores in
America today than there are McDonald's. They're making millions of loans each year, but for many
customers like Sandra Harris, the fees end up bigger than the loan.
Over two years, Harris borrowed $2,510, and paid $10,000 in fees.
"Now, a lot of people are probably doing the math and they're going, 'Does she mean it the other
way around?' Probably a $10,000 loan, I don't think you would pay $2,000 back in fees," says Harris.
"But $2,000 to have paid $10,000 in fees..after you roll them over a couple of times. Yeah it's
possible."
Harris took out her first payday loan, $500, to cover a car insurance bill. And she discovered the
loans are easy to get.
You don't need credit, just a job and a checking account. You write a personal check to the payday
store for the amount of the loan, and the store gives you the cash minus the fee, anywhere from 15
to 30 percent. The store holds your check for two weeks and then cashes it. If you still need the
money, you write the store a fresh check every two weeks and the store keeps deducting the fees.
And that's how it was with Harris, who is a disc jockey and teacher in Wilmington, N.C. She took out
several payday loans when her husband lost his job as a chef and money was tight.
"All of it sounds like, you know, quick and easy, and that's exactly what it was. But you know, nobody
told you about the bad side," says Harris. "Because they wanted you to come back. That's how they
made their money."
"It's not a fair fight. It's the consumer getting in the ring with Mike Tyson. I mean, we all may know
the rules, it may be legal, but it's gonna be ugly the way it turns out," says Jim Blaine, chief
executive of the non-profit North Carolina State Employees' Credit Union. He noticed the explosive
growth of payday lending when some of his customers got into trouble.

2. "If someone came to you and said, 'I'm gonna take one of these payday loans out, knowing what you
know, what would you tell that person?" asks Pelley.
"I'd say go get a loan shark. They're cheaper," says Blaine. "A loan shark only charges about 150
percent. Why would you go pay 400 percent? Any other choice on the planet is better. A credit card
at 18 percent is better. A finance company loan at 36 percent is better. You know, borrow from mom
or your uncle. Any choice is better."
"You're not equating this to loan sharking, are you?" asks Pelley.
"No, I think it's far worse," says Harris. "I wouldn't insult the loan sharks."
Harris went broke paying the fees. She was evicted from her home and her car was repossessed.
What does a payday lender have to say?
"How about a thank you? How about, 'Thank you, Mr. Green or Mr. Check Casher or Mr. Payday
Advance Store for helping me out when I was in a time of need?'" says Willie Green, who owns three
payday stores. He's a former wide receiver for the Carolina Panthers. But now, he's on the board of
directors of the national payday trade association, and is a lobbyist for the industry.
"Thanks for 400 percent?" asks Pelley.
"No, it's wouldn't have been 400 percent if she came in on time," says Green.
"Fifteen percent in two weeks becomes 30 percent a month, becomes 400 percent a year," says
Pelley.
"That is correct, if you had a person taking out 26 loans a year, but that's not the case," says Green.
"The average person only used this service 7.9 times a year or 6.9 times a year. So you don't have a
person coming in week after week after week after week."
Green says payday stores are for short-term borrowing and it's not the lender's fault if people like
Harris abuse the service: "This woman did this on her own - no disrespect to her. I feel bad for her, if
this happened. But she did this of her own free will. OK? No one forced her into these stores to get
these loans."
No one forced John Kucan either, but once he started, he couldn't stop. "It was almost like being
addicted to it, 'cause then you get used to taking these loans," says Kucan. "I mean, that's a big
word, but that's how I feel about it."
Kucan was a Connecticut state trooper until he was shot in the line of duty and disabled. He retired
to North Carolina, but after a few years, his home state, Connecticut, said it overpaid his benefits
and wanted the money back. He and his wife took payday loans and renewed them 15 times. They
borrowed $850 and paid $2,400 in fees.
Copyright 2005 CBS. All rights reserved.
http://www.cbsnews.com/news/paying-more-for-payday-loans/
Final Thoughts:

3. As you can start to see the news source above says regulators are ready to crack the whip on payday
advance lenders. I'm wondering what you're ideas are on this?