MONEY FOR NOTHING

June 28, 2016 8:25 AM

Confessions of a Payday Lender
posted by the man of twists and turns (29 comments total)

I wish people would talk more about this kind of thing - it's not enough to raise the minimum wage to the point where you can feed yourself, you have to regulate the firgging wolves so you stand a better chance of not being trapped in an endless cycle of poverty.

I hate Hate HATE these places, and they're all over the place in Florida.
posted by Mooski at 9:00 AM on June 28, 2016 [15 favorites]

"Nobody cares about the poor."

The only surprise, is that anybody is surprised about that. I use check cashing, payday loans, title loans and pawn shops to gauge how an area is doing economically. I was uncomfortable buying a house a few miles from one place, but I did it, and the place has since shut down.

I've also considered opening a bible-themed check-cashing chain, on the assumption that religious people might be more conscientious about paying their debts (or at least be able to get their co-religionists to pony up), but it's mostly a thought exercise -- I don't think I can pull off the necessary level of smarm to sell it.
posted by spacewrench at 9:11 AM on June 28, 2016 [2 favorites]

spacewrench: the Episcopal Diocese of Los Angeles actually runs a credit union as "an economic justice ministry". I don't know anything about it beyond five minutes' poking around on the website and a few flyers I've seen around, but knowing the diocese I'm willing to bet it's at least in part an attempt to come up with an effectual, on-the-ground response to the predations of the payday loan industry. (Now whether the attempt is successful is another question entirely, even if this is the intention.)
posted by golwengaud at 9:22 AM on June 28, 2016 [12 favorites]

Payday is big business in Nashville, where I live, which is supposedly one of the up-and-coming boomtowns for people looking for second chances and a cheaper cost of living. If I could make a dollar off every payday loan ad I see on local TV stations, including the shady pay as you go auto lots, which is a completely different subject (albeit the same genus of sleaze), I would be a very rich dude at this point.
posted by blucevalo at 9:29 AM on June 28, 2016 [2 favorites]

There's a place here called Grace Period that purports to be a Christian-based nonprofit payday lender and their Google Reviews and BBB page are... yeah, about what the most cynical among us might suspect.
posted by soren_lorensen at 9:31 AM on June 28, 2016 [4 favorites]

Politics.

Deregulation proved critical to the spread of payday lending around the country. ... generous campaign contributions to the right politicians secured them sit-downs with governors and meetings with key legislators. ... state after state granted them their carve-outs, exempting payday loans from local usury laws.
posted by CheeseDigestsAll at 9:55 AM on June 28, 2016 [5 favorites]

“Nobody cares about the poor”
...
At the end of 2013, more than a year after dramatically switching sides in the fight over payday, Locke got back into the business. His wife missed the trappings of their old life. So did he.

just... Ugh.
posted by BekahVee at 9:56 AM on June 28, 2016 [6 favorites]

There is a cluster of payday loan stores at an intersection known in town as The Hub (it's where the cheap student bars and fast food outlets are). One of the most depressing things I've ever seen is a children's play area in the windows of one of those places.
posted by Kitteh at 10:01 AM on June 28, 2016 [6 favorites]

Not surprising that in the end he went back to the business. His complaints about the process of trying to blow the whistle seemed mainly to revolve around money he spent that he felt like he didn't get a good return on.

Some people see the world filtered through dollar signs. Some don't. This guy is definitely one of the former.
posted by wierdo at 10:26 AM on June 28, 2016 [5 favorites]

I've also considered opening a bible-themed check-cashing chain

There's a place here called Grace Period that purports to be a Christian-based nonprofit payday lender

Granted, I'm not the most pious person in the world, but IIRC the Bible had quite a bit to say on the subject of usury, all of which can basically be summarized as "DON'T". I wonder how the people running that particular flavor of business square that with their scripture.
posted by Strange Interlude at 10:35 AM on June 28, 2016 [9 favorites]

Deregulation proved critical to the spread of payday lending around the country. Most states have in place a usury cap, a limit on the interest rate a lender can charge, typically under 20 percent. So Jones placed lobbyists on retainer, as did the competition that invariably followed him into the business. These were once-in-a-blue-moon emergency loans, the lenders claimed, for those who can’t just borrow from their Uncle Joe or put a surprise charge on a credit card; certainly interest caps weren’t put in place to prevent a working stiff from borrowing a few hundred dollars until the next payday. Throughout the second half of the 1990s and into the early 2000s, state after state granted them their carve-outs, exempting payday loans from local usury laws. At its peak, the payday industry operated legally in 44 states plus the District of Columbia.

I'm not saying we HAVE to go to these people's houses and set on them fire, I'm just wondering... have we TRIED going to these people's houses and setting them on fire?
posted by Mayor West at 10:40 AM on June 28, 2016 [16 favorites]

Hey, here's something you can do to help. If you see any of those "CASH NOW" signs up, or for that matter the "WE BUY HOMES" or "WE BUY JUNK CARS" or anything like that, if they're by the side of the road on public land, or the strip between the sidewalk and the street, or on a phone pole or light post, they're considered "illegal trash" and you can just pull them up, cut them down, or rip them off and junk them. The amount of satisfaction you get from it is amazing.
posted by Slinga at 11:02 AM on June 28, 2016 [20 favorites]

Good to "know", slinga.

Regarding payday loans, when I'm king, it's up against the wall, rent-seeking mother...
posted by notsnot at 11:13 AM on June 28, 2016 [5 favorites]

I'd like to see these people asked what a world that didn't need payday loans would look like.
posted by rhizome at 11:18 AM on June 28, 2016 [1 favorite]

I'd like to see these people asked what a world that didn't need payday loans would look like.

I think you're looking for a level of introspection that "fuck you, I've got mine" really doesn't allow for.
posted by Mooski at 11:32 AM on June 28, 2016 [8 favorites]

I wonder how the people running that particular flavor of business square that with their scripture.

the same way all hypocrites of alleged religious bents do, by simply not giving a fuck about anyone but themselves and then weeping dramatically and promising to repent when they're caught.
posted by poffin boffin at 12:02 PM on June 28, 2016 [10 favorites]

If you see any of those "CASH NOW" signs up, or for that matter the "WE BUY HOMES" or "WE BUY JUNK CARS" or anything like that

There's someone in my area who has a seemingly-endless supply of large pink "SCAM" stickers to place over the phone numbers on these signs. Gets the message across with a lot less work, and poisons the market for other similar signs. I would chip in for some of these stickers if I knew who to contact -- every time I see one I feel comforted that someone out there gives a damn.
posted by asperity at 12:26 PM on June 28, 2016 [20 favorites]

Someone I *might* know uses red spray paint to write "SCAM" or a circle/slash on such signs. The really egregious ones get stuck up very high on a pole, where the perps would need a ladder to get it down. This person has to tackle a new batch of signs about every year, but it's slowed down since the last economic collapse.
posted by dbmcd at 12:52 PM on June 28, 2016 [4 favorites]

Hey, here's something you can do to help. If you see any of those "CASH NOW" signs up, or for that matter the "WE BUY HOMES" or "WE BUY JUNK CARS" or anything like that, if they're by the side of the road on public land, or the strip between the sidewalk and the street, or on a phone pole or light post, they're considered "illegal trash" and you can just pull them up, cut them down, or rip them off and junk them.

I imagine it depends where you are. Here they're considered "Free Speech." [pdf court decision] I don't think that means it's illegal to take them down, but it is unconstitutional to ban them, which means they're not illegal trash.
posted by If only I had a penguin... at 1:23 PM on June 28, 2016

There's someone in my area who has a seemingly-endless supply of large pink "SCAM" stickers to place over the phone numbers on these signs.

My android phone now says "Scam or Fraud" as the caller id name when scammers call. I don't know if this is android or my cell provider, but it's great.
posted by If only I had a penguin... at 1:24 PM on June 28, 2016 [4 favorites]

Granted, I'm not the most pious person in the world, but IIRC the Bible had quite a bit to say on the subject of usury, all of which can basically be summarized as "DON'T".

None of it in the New Testament, which is really all that matters.

Of course, if Xianity did prohibit interest, I'm sure we'd see the same regulatory arbitrage we see in religions that do.
posted by jpe at 4:16 PM on June 28, 2016

I've often fantasized about coming into a small amount of Fuck You money and standing outside a check cashing place and stopping everyone going to give them the money they need or pay off the money they owe with the promise they'll do whatever they need to do to never, ever have to come to one of these places again. I can't not drive past one of these places and think about that. It's a self-serving rescue fantasy, but boy would it feel good.

The "whistle blower" is such really a top notch villain. He pretends to be a consumer advocate, and when that doesn't win him some sort of celebrity status, he goes back to his business- which he had only put in his mother's name. All the getting rid of his trappings from the old way of life was a lie. I'm wondering how much was sold and how much was just put in storage or in his mother's basement.

At least it explained the growing dissonance I was feeling with what he was quoted as saying and what he claimed he was doing. Oh, this is what disingenuous reads like!
posted by [insert clever name here] at 9:10 PM on June 28, 2016 [1 favorite]

What's the fix though? Numeracy might tell me a payday loan is a shit deal, but it won't pay to get my car out of impound because I was working late.
posted by fragmede at 9:12 PM on June 28, 2016

Numeracy can help with that, too.
posted by rhizome at 9:22 PM on June 28, 2016

I assume there's a way to help people in need of short term loans that's neither massively profit seeking nor straight up debt forgiveness. I mean to say, could I open a short term loan business that actually helped people without turning a profit nor becoming a money sink, assuming I had no interest in profiting? Is that a local optimum in play?
posted by axiom at 10:59 PM on June 28, 2016

The article covers some new rules meant to address the problem of payday lenders, along with some additional suggestions from the Pew Institute. But there is a lot that can be done. Lowering the interest rate, or requiring longer minimum repayment periods to name a couple.
posted by [insert clever name here] at 2:29 AM on June 29, 2016

I've seen a few TV ads for a company called loanme. Their website shows that for a "less than prime" loan of $2600 you can expect to pay back $18,000, and for a $10,600 loan you can expect to pay back almost $58,000. The loan fee for this is $2500, you can also get $10,600 with a loan fee of $500 but then you'll pay back $71,000.
(California rates.)

It does look like you can prepay and maybe save some money that way, but WOW!
posted by Death and Gravity at 10:56 AM on June 29, 2016

When those ads first started running, the "minimum loan amount: $2600" jumped out at me, so I looked into it. Turns out that there are interest rate limits for loans under 2500 that don't apply to larger loans, and (in California) there is no limit to the interest that can be charged on higher amounts.
posted by rhizome at 1:22 PM on June 29, 2016

the Episcopal Diocese of Los Angeles actually runs a credit union as "an economic justice ministry".

That's the way that Credit Unions work in the UK. They tend to be much closer to a non-profit (and much smaller and far less bank like) than their US counterparts, essentially they act as direct counter-points to loan sharks and payday lenders . They operate as pooled saving schemes, you pay in a small amount on a regular basis and after a certain period you are entitled to take a low interest loan from the pool. Its a good model and they are effective at what they do, but since they are limited to the funds saved by there members they can lack economic clout.
posted by tallus at 5:25 AM on June 30, 2016