Payday Loan Statistics - Misleading Politicians and the Media
Thomas Sowell at the National review wrote an interesting article about payday loans and the magic of numbers. In it he wrote, “A common practice in making small loans of a few hundred dollars for a few weeks is to charge about $15 per hundred dollars lent. Politicians, the media, community activists, and miscellaneous other busybodies are able to transform these numbers into annual percentage charges of several hundred percent, thereby creating moral melodramas and demands that the government “do something” about such “abuses.”
New Payday Loan Study Positive for the Industry
“The survey evidence paints a negative picture of how consumers view credit union payday loans,” the report said. “Most payday borrowers indicate a strong preference for a less restrictive but high-price standard payday loan; very few prefer the credit union version of a payday loan. Borrowers’ distaste for the credit union payday loan is driven most strongly by credit unions’ shorter hours of operation, a lack of privacy conferred because credit union payday loans do not ‘keep my payday borrowing separate from my other banking, for personal reasons,’ and the fact that defaulting on a credit union payday loan harms one’s credit score.”
