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.”

Mr. Sowell goes on to discuss the ramifications of the passage of legislation in Oregon that reduced the maximum allowable usury rate to 36% resulting in the closure of Oregon small businesses, the misinterpretation of “numbers” by politicians and the media to achieve their wrongheaded goals and more. He ends with this, “In other words, numbers do not “speak for themselves.” Politicians, the media and others speak for them — very loudly, very cleverly, and often very wrongly.

He also wrote, “Not surprisingly, most of the small finance companies making payday loans in  Oregon went out of business. But there are no statistics on how many low-income people turned to loan sharks, or had their electricity cut off, or had to do without their medicine.”

“This is just one of the many ways in which self-righteous busybodies leave havoc in their wake while going away feeling noble.”

It’s an inciteful article. It’s entitled, “Magic Numbers, Don’t be misled by payday-loan statistics.” It’s short and concise; certainly worth a few minutes of our time!

Again, here’s a link: “Magic Numbers Don’t be misled by payday-loan statistics.”


Payday Loan Profits – Cash America Coninues to Grow and Prosper

The Associated Press ran another story this A.M. regarding the purchase of 39 pawn shops by Cash America International Inc.

Their headline reads:
Cash America buys pawn shop chain for $70M

They went on to write, “Cash America’s first-quarter profit rose 34 percent on a revenue increase of 17 percent, helped by higher revenue from its cash advance business.”

So… the big, sophisticated guys and, from what we hear, many of the small players operating under the radar, continue to expand to increase market share and to achieve record profits. It appears they’re certainly not sitting on the side lines at this juncture in the economy.

Read the original Article here:
Cash America continues to grow and prosper…