UK Door Stop Lenders Blamed for Poor!

A study by the UK Public Policy Research Institute, which followed the economic fortunes of 58 low-income families, came to the conclusion that making easy credit available to the poor actually harms them.

I suppose the rational is that by not acting as a lender of last resort, the families having exhausted all other means of obtaining cash to pay their rent, buy food and keep the lights burning, these families would have accessed the public dole much sooner.

But wait! The study goes on to describe how the U.K. government is stretched beyond capacity to contend with the growing numbers of families having no where to turn for emergency financial help. Another recent report revealed the government of the U.K experienced a 28% increase in demand by the financially challenged for “crisis loans.”

These people are nuts! Their report actually states, “Cheap credit has pulled the UK’s poorest families into a spiral of debt.” What are they thinking? Would not these families have run out of options even sooner had the “door stop lenders”, payday loan operators, car title and other “no credit checks and no questions asked” lenders failed to provide emergency cash?

Because we make money available to families who have no where else to go WE ARE TO BLAME for their misfortune! Man, I don’t get it.


Wisconsin Payday Loan Laws & Legislation

Payday Loans and Wisconsin – A Good Compromise

Wisconsin payday loan regulators have stitched together a compromise bill that offers strong consumer protection and allows the very popular payday loan product to continue to be offered as one of many financial solutions for Wisconsin residents.

In essence, the proposed Wisconsin payday loan bill will limit payday loan consumers to a maximum $600 payday loan or 35% of a borrower’s 2-week gross income, whichever is less. This proposed $600 maximum payday loan would include any fees associated with the payday advance.

This payday loan legislation would not cap the annual interest rate that lenders can charge on payday loans. A previous bill would have limited them to 36 percent. Rep. Donna Seidel, D-Wausau, said, “The cap would have gone too far in choking off credit for borrowers struggling in the economic downturn by essentially wiping out the industry.”

Additionally, the proposed payday loan legislation allows payday loan borrowers one payday loan at a time. This would be assured by the implementation of a Wisconsin payday loan data base to be industry funded; $1 per payday loan.

Consumer protectionists applauded the proposed Wisconsin payday loan legislation because it specifically prohibits payday loan lenders from “rolling over” a payday loan consumer’s outstanding debt into a new payday loan. This addresses the so-called “cycle-of-debt” issue, a practice attacked by competitors against payday loan products. This includes banks, installment lenders and credit unions.

In 2008 Wisconsin, it’s estimated there were 530 payday loan stores that gave out 1.2 million loans totaling $723 million.