4 Ways the Payday Loan Industry Sucks Billions From Local Economies (Hard Times USA)

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http://www.alternet.org/hard-times-usa/4-ways-payday-loan-industry-sucks-billions-local-economies-hard-times-usa



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1. Millions not spent locally. The study noted that in 2011, the total interest payments made by borrowers in 33 states was $3.3 billion, with California, Texas, Mississippi, Illinois and Alabama paying the most interest. But then it looked at how much of the interest payments were being diverted from local economies and concluded that “the payday lending industry had a negative impact of $774 million in 2011.”

2. Kills local job creation. The study found that payday lending drains $2.5 million from local economies daily. “In addition, we estimate that more than 38 people lose their jobs each day due to the economic drain of payday lending. Far from creating economic opportunity, payday lending creates impoverished households and endangers local economies.” All told, the study said that the loans have led to the “loss of more than 14,000 jobs” in 33 states.

3. Pushes people into bankruptcy. The study found that “payday lending caused an estimated 56,250 Chapter 13 bankruptcies in 2011,” adding that “with an average cost of $3,000 per bankruptcy [in legal fees], these bankruptcies cost the economy an additional $169 million.”

4. Total local losses about $1 billion. The economic impact of loan payments that divert money that otherwise could be spent locally ($774 million), and bankruptcy fees tied to payday loans ($169 million) “brought the total loss to nearly $1 billion,” the study said. These costs do not reflect the emotional pressures and trauma that come from living under a worsening cloud of debt.

[datasuspect]

1. juice loans from organized crime have lower interest (vig) than payday loans

[Travis_0004]

4. The interest may be lower, but the pentalities for non repayment are a bit higher.

[Arcanetrance]

2. They're ridiculous my step brother lives in Texas and apparently they have no limit on how many you

you take out. He's in debt to 7 different companies I looked at his interest and it's like two paychecks to cover one loan

[douglas9]

6. Payday lending prospects look grim in the House (x post tejas)

Late into the night on Monday, the payday loan industry strutted its stuff before a very friendly House committee. The hearing came just a week after the Senate passed a surprisingly tough bill that the industry insists would shut down most of Texas’ 3,400 payday and auto-title storefronts. Even though the legislation aired last night is a faint shadow of the Senate bill, it got a rough treatment from six of the seven committee members.

Only the chairman and author of the bill, Rep. Mike Villarreal (D-San Antonio) evidenced any interest in cracking down on the industry.

“I think the tone of the committee was that clearly there was no support for what Villarreal put out there, at least right now,” said Ann Baddour of Texas Appleseed.

What happens next is anyone’s guess but it is possible that payday reform is dead for the session.

http://www.democraticunderground.com/10788436

[Recursion]

3. ****ing parasites

God, I would love a usury law about now.

[MrScorpio]

5. Another example of why it costs more money to be poor in America than it is to have money nt