I hate payday loans

Yesterday I proclaimed my appreciation for Sacramento RT and Elk Grove e-Tran. Today's bit of bloggery has to do with an industry that should, even in a free market, be run out of town like criminals. And, sadly, one I became all too familiar with during the first part of this decade.

Back when I was a kid, usury laws were on the books that forbade the loaning of money at massive rates of interest. People with wealth and property could always secure loans with collateral from federally regulated banks. Folks lacking these resources turned to "the bank of Guido and Luigi," the local shady operators, often a Family operation, who substituted the threat of pain or worse for more tangible resources and charged enormous rates of interest. Well, laws have changed and the collection specialists (legbreakers) are something of a thing of the past. Now anyone with a fixed address, a steady income and a startling lack of financial sense can score for themselves a "payday loan" from one of 22,000 such bloodsucker locations scattered across the fruited plain.

Payday loans are like the Dark Side of the Force in Star Wars: " . . . once you start down the Dark Path, forever will it guide your destiny . . ." "Easy" money is soooo seductive, a quick way out of a jam that carries a tremendous cost of its own. How well I know because a few years ago, my paydays were little more than covering last pay period's payday loans and re-writing new ones . . . then taking the cash, minus a couple hundred in fees, to pay the bills.

I admit it, I knew better. I could read the disclosure statements and I winced at the 300% - plus APR interest rates. I wish in retrospect I could have learned to say NO to these loans. I'm owning up to my own weakness, accepting my share of the blame. I've completely eschewed them and stayed that way for almost two years.

It seems that the industry now has a trade association. Go figure.