(Payday Loans) can trap consumers with interest rates, hidden fees.

These loans are essentially a type of entrapping "tax" on the poor and unsuspecting. I think they should be illegal. The only people who do well with them are the lenders, who are barely this side of loan sharks.

SCOTUS Eviscerates Payday Lenders For SLIMY Move

Payday lenders try to dismantle CFPB in Supreme Court case.

A group of payday lenders complained to the Supreme Court that the Consumer Financial Protection Bureau
is unconstitutional, but that argument appears to fall of deaf ears. Ana Kasparian discusses on The Young Turks.


Published Oct 7, 2023

I remember railing about these payday loans one day at work and getting attacked for wanting to deny workers the ability to pay their bills and provide for the security of their families. I decided not to pursue the matter.

That's the really sad part, people wind up paying back $50 for every $1 they borrow.

The killers are the fees. You might have an usury law saying you can't charge more than a certain interest rate, but there is no rule on fees, so a 30 day loan of $200 might have a $20 fee to apply adding 120% to the effective annual interest rate. A simple solution would be to include all fees into the effective interest rate and then apply usury laws.

I think Jes had it right when she called them loan sharks, taking advantage of people when they're down and out. It's sad that some of them have no choice.

1. I agree with everything you are saying.

2. I vaguely remember getting one of these payday loans many years ago.

3. I think it was probably close to 30 years ago.

4. If my memory serves me correct, I think it was a small $200 loan.

5. If my memory serves me correct, I believe I had to pay back that small $200 loan in full, two weeks after receiving the loan.

6. The cost for having that small loan for (only two weeks) cost me $30.

7. When I paid them back that $200 loan, plus the $30 charge in two weeks, they were telling me that if I needed more time, that I could hold off on paying back that loan for an additional two weeks.

8. The catch was that if I took them up on that offer, they would have charged me an additional $30 on top of the initial $30.

9. In that scenario, that small $200 dollar loan would have cost me $60 for a mere four weeks of having the loan.

10. I told them "No, I'm not interested"

Are Payday Loans Ever a Good Idea?

Published Sep 28, 2022

The overall problem here is that in a society where the government is not your parent, people are allowed to offer ridiculous products to the public and the public is allowed to buy them. There are all sorts of bad ideas out there, but I think the role of government is to make sure the product is accurately portrayed so that the public has the information needed to make a good decision. I think including fees into the interest rate calculation falls in this category. "Just to be clear consumer, the interest rate on this product is 200%." I don't think the government should ban them.

I agree. But: stores, restaurants and other businesses in the USA don't tell you the total price as well.

Easily said if you have a choice. Payday loan shops are primary in poor neighborhoods for a reason. These people rarely have a choice and need to
accept the terms of a loan shark. Sometimes it's either this or not having food, electricity or whatever basic needs they have. Poverty in the United States is ever so increasing and it's pretty expensive to be poor!

We go to Costco and buy everything in bulk so we can save money. A poor soul can't afford to go to Costco, they have to buy everything in small quantities because they simply have not enough funds and small quantities are sometimes twice the cost.

Yes, government is not our parent, but we have to protect the less fortunate ones and it's our duty as a society to help them not being taken advantage of by the cruelest of the cruelest to make an extra buck off poor peoples back.

1. I believe that the government should step in when predatory loan practices become EXTREME.

2. What is define as "EXTREME" may be subjective.

3. But, I do believe that virtually everyone would consider the effective interest rate of payday loans way past EXTREME.

4. These payday lending companies prey on the most (vulnerable) and the most (desperate).

5. Because, the payday loan interest rates and fees are so EXTREME, I believe the government should take steps
to combat these EXTREME predatory lending practices.

6. I read that some states have placed caps on interest rates and fees on these payday lenders to combat this issue.

7. In my opinion, I agree with the states taking these steps.

8. I also believe that the federal government should take similar actions, so that the states wouldn't have to.

9. I read that some states have placed interest rate caps at 36 percent.

10. Let's be clear, 36 percent is a very high rate, but it is still a bargain compare to the fees and interest rates being charged
by these payday lenders.

11. The very high interest rate of 36 percent is not as extreme as 400 percent.

12. The very high interest rate of 36 percent is not as extreme as 700 percent.

13. I don't find anything wrong with charging consumers who have bad credit higher interest rates.

14. Just like I believe that consumers with good credit should get lower rates.

15. That's the way it should be.

16. It's the EXTREME interest rate and the predatory nature I have a problem with.

1. It's understandable to get that reaction.

2. That person might be in desperate circumstances and payday loans may have been their only option.

3. The sad thing is, that is precisely what these payday lenders (feed) on. They (feed) on that person's desperation
who has no other options available to them.

4. I just don't think these payday lenders should be allowed to (prey) on the consumers vulnerability
by charging 200, 300, 400, 500, 600, 700 percent interest rates.

I agree. At a minimum, the customer should know exactly what the service can cost.

1. Yes. I agree that the true APR interest rate and fees should be clearly and fully disclosed.

2. I also believe the government should set maximum interest rate and fees on these payday loans
to not exceed 36 percent APR.

Nebraska votes to cap payday loan interest rate at 36%

Bringing down the annual percentage interest rate from 400% to 36%

Yahoo Finance's Aarthi Swaminathan reports on the payday interest loan cap that was voted in by Nebraska voters.


Published Nov 5, 2020

A 36% Rate Cap Stops the Debt Trap.

The fifth episode in our "In Focus" video series, designed to explore complex financial issues
and put them into accessible terms, describes how a cap on annual interest rates of 36% has
freed many states across the country from predatory payday lending.


Published June 15, 2023

My state, California, has capped the amount to loan and the maximum amount to charge is 15 %

Under California law, the maximum amount a consumer can borrow in a payday loan is $300. The maximum fee a payday lender can charge is 15% of the amount of the check (up to a maximum of $45).

Does that include any extra charges?