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Discussion in 'Other Off Topic Forum' started by PeterS, Dec 17, 2003.
This is VERY interesting:
You need a login. But if this refers to those advance check cashing places, I have *always* said that those are almsot criminal. They withhold massive sums of money from individuals who can't even afford it in the first place, capitalizing on the poorest of our nation, exacerbating the problem.
To hear (if I am not mistaken) that they are doing it to our servicemen as well only adds to my image of them.
All the commands I've been at have put those places on the off limits list. Also when I've checked in to a new command they've always had some training about the interest rates these places charge. It doesn't stop a lot of people from going there still, but it does make some people aware.
PeterS - Before you judge, think about it.......
I have heard too many times how pawn shops, auto title loan, check cashing, payday advance, mortgage and other simmilar types of businesses 'rip people off'.
FACT - Over 60% of the population in the US is 'unbankable'. Meaning, they cash their check and have a cash system (in their pocket) until they run out. They then wait until payday again. They have no bank account, no credit cards, typically horrible credit, etc... These people live in a cash society from paycheck to paycheck.
The reality is, these people NEED these types of businesses in order to help them survive between paychecks, etc... There is NO way someone without credit could go into a NationsBank, or any other large bank, and try to get a $200 loan, cost effectively, to make it until their next pay period. Nor could they do it timely, before that person's lights are turned off, or other deadlines pass. Even if they did have credit and a banking relationship (excluding credit cards, etc...) the bank fees to do so would outweigh the costs charged by these establisments. Reality - a $12-$25 per month fee that is charged by most traditional banks for a checking account to someone who only makes minimum wage is a HUGE cost too. Theese businesses, that most middle and upper class people frown upon, are , in essence, a 'poor man's bank'.
The people utilizing the services are a higher risk. That translates into higher returns. Nothing unusual about that!
These companies serve a VERY important function to keep things going for a large portion of the population. If they weren't there, that population would be SOL. Case in point - a state implemented laws to detract from what was called 'predatory lending' for mortgages. Because traditional banks never would lend to these people and the lenders who once did now don't, there's noone to lend to these people. Now everyone is up in arms that no one is lending to these people and they can't buy houses now.
All of these businesses are competitive in price and the consumers have the choice of who to do business with in this arena. That should dictate a supply/demand pricing structure. No one has a gun to their heads to do business with a company or not. These people do so on their own!!!
These are the ONLY banking type assets this population has....why?.....because most business do not want to deal with the risk involved. If you take this away, this population has NOTHING!!!
ILuv4Res, very well said. I agree 100%
The reason the rates are high is that the risk is high. While lots of people like to depict these places as "preying on the innocent" it's not so. These people CHOOSE to give their business to these types of places. Most of the time these people are in their situation do to poor choices. While unfortunate, it is a choice, not a position that has been foisted upon them. It is incumbent upon the individual to educate themselves about their situation. Until they choose to change their own lives these places will always exist, legally or not.
Its an ugly business, for sure. We have a row of buy-here-pay-here car lots, check cashing places, and "instant insurance" places.
The people who could use a break the most are the ones who usually get taken advantage of the most.
ILuv... I agree to some extent, but to bend over a US service person? Where is the risk of a service person coming into a payday loan Co with good ID? Any company that will rape a US service person is probably the same sort of person that would spit on our flag.
I hate to say it, but most of the lower enlisted ranks live below the poverty level and don't have great credit. Been there, done that.
Peters- you would be surprised what type of checks come back as uncollectable. I have personally seen government refund checks cashed by the person named on the front, who then claims that the mailman must have put the check in the wrong mailbox and someone else cashed it.
Regarding the 'service' people. If they need the payday advance, they are probably in the same financial position as anyone else needing that service. That equals risk on the part of the check casher/payday advance company. That company isn't in business to do favors for any class, type or status of the person coming in to do business with them. If they did, there would be articles on how they discriminate!
Why doesn't the government just lend them the money???? Why don't you just lend them the $??????? The answer is simple......most people don't want to because of the risk.
I agree that these people need a break the most, however, they are usually in that situation by their own actions or inactions. To put it into F-chat perspective....I'm sure there are plenty of people who own a F-car that could use a break on service costs. In fact, the dealer usually charges an arm & a leg for just about anything they do. Does that mean that the service department should be written up on how they cheat people out of their hard earned money? No, it's your choice who you do business with. It's also your choice to educate yourself before buying the car. It's also your choice to log on to f-chat to see if there's an inexpensive fix. It's also your choice of even if you should buy the car in the first place. If you choose not to do your homework, you surely will pay more.
What the article doesn't tell you is the number of people who would be SOL if these places didn't exist in their 'cash society'.
Here is the article from Yahoo!
Lenders Sink U.S. Soldiers Into Debt
See my posts above!!!
I wasn't necessarily trying to refute what you had to say, just giving a working link to the story.
California like a good many states has a Sailors and Soldier's relief act. That means that if you are on active duty (reservist) the interest is capped in some instances. California also restricts the interest that its citizens can pay to approximately 10% (the forumla is complex). It seems that the other states have the same problem.
However, because it appears these guys are charging more interest than the law allows, isn't the contract illegal, and therefore unenforceable. That may very well be how to deal with this type of scum, who break the law to charge excessive interest on those who can least afford it.
My ex girlfriend used one of those payday loans places to go gamble in vegas. i thing if i recall looking at the paperwork the APR was close to 600%.
Any how after she lost all of her payday loan out there and came back all pissy i told her Adios B#@#$
No sympathy for them at all. None! These same stinkers are the ones who will walk on my owner finance deals I do for them when nobody else will loan them a dime.
And no sympathy for servicemen either. Coworker just told me about when he worked in collections for Volvo and had to chase a guy to a secret base in Turkey to collect.
I have a good friend that actually owns a check cashing store and he performs a service that no one else will. You liberals can whine all you want but the fact of the matter is that no one forces people to get advances on their checks or to cash their checks at a check cashing store. Many people don't trust banks, don't have any credit to get accounts etc. The rates are competitve because these stores are everywhere and people could go next door for a better rate. And yes, he still gets burned all the time. He is in court all the time proving that someone recieved their Gov. check and cashed it in his store and then they report it as stolen and recieve another. You can feel sorry for these people all you want but I don't see anyone else giving these people loans. A higher rate for a few weeks to inable someone to pay there truck payment before it gets repoed or their rent befor getting evicted or higher penalties doesn't sound to bad to me.
Are payday loans expensive? Sure Are they high risk? sure Do they help out those that need it most? Yes
I personally think that the U.S. should be able to give a cash advance loan to our soldiers at NO cost, but it won't happen as there's "too much paperwork".
There are agencies set up on every military base in the world that will advance (at NO INTEREST) a loan to a serviceman/ woman. BUT, in order to get an advance through the family services center, you have to meet with a counselor (again, this is FREE) who will look at your budget and make sure you're making good financial decisions. They will advance you up to a month's pay, and take it out over the course of a year.
Its a simple process, but they do 'get in your business' to make sure that you're not sinking yourself further.
When I was overseas my wife lost one of her caps on her teeth. The country we were living in didn't have dental care up to par with the repairs she needed, I used this service to get the loan to get her back to the states, repaired, and to get her back. It took about 2 hours total. No big deal, and it was free.