Elected Officials
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Posted by Don
(64.203.129.94) on March 04, 2004 at 23:50:20:
Our elected Reprentatives and Senators
All of them are bought and paid for by the credit criminals from the lowliest of Payday Lending thieves to the likes of the MBNA crooks running scam arbitration. All are bought and paid for by lobbyists. Let your elected officials know how you feel. This is an editorial from the Atlanta Journal-Constitution March 4, 2004 Don't let payday lenders line their own pockets If the furnace fails on a frigid night, you can plug in space heaters, bundle under blankets or bust up the chairs and light them on fire. The last option will chase out the chill, but you could end up without a house. Resorting to a payday loan in a crisis is like torching your house to stay warm. You'll be toasty for a while but burned out shortly after. That thousands of Georgians use payday loans and pay triple-digit interest is not a good reason to endorse what the attorney general's office condemns as a "treadmill of debt." It is reason for the General Assembly to halt a renegade industry that operates in brazen violation of Georgia law and preys on the desperate and the financially untutored. "The payday people are making millions and millions of dollars here and they accept the weak penalties in our current law as the price of doing business," said Insurance Commissioner John Oxendine on Wednesday. "We keep chasing them and, when we finally win in court, they just close their doors and open the very next day." Payday loan customers pay an average annualized interest rate of 474 percent, according to the Consumer Federation of America and the Public Interest Research Group. While the industry contends its clients are firmly middle-class, independent research suggests the average income of borrowers is $25,000. The industry and the independent studies agree that payday lending is highly profitable. In 2002, revenues topped $45 billion nationwide.
The vast wealth of this explosive industry has led to a wildly effective campaign in the House to portray payday lenders as the friendly folks on the corner willing to front a cash-strapped single mother $200 to cover the gas bill. An unholy House alliance -- led by Reps. Earl Ehrhart (R-Powder Springs) and Tyrone Brooks (D-Atlanta) -- is blocking a Senate bill that imposes some regulations on payday lenders. Savvy payday lobbyists are plying the GOP conservatives with stories about how the bill infringes on free enterprise. They're snookering the black lawmakers with tales of how poor people won't be able to make ends meet. "There are people who really need payday loans," says Brooks. "My relatives use this service because it's quick, it's convenient and they don't run a background check and put them through all sorts of hassles." If Brooks' relatives have to borrow from payday lenders, he ought to help them out. Payday loans represent financial quicksand. A payday loan is a high-interest, two-to-four-week loan backed up by a post-dated personal check that the borrower promises to repay out of the next paycheck. Many people can't repay the loan on time, so they roll it over. In six months of rollovers, a borrower who took out a $200 loan pays the lender $325 and still owes the original $200. In Indiana, 77 percent of payday loans are rollovers. The typical payday loan customer in North Carolina took out seven loans in 2000, up from 5.8 loans in 1999. Brooks parrots the lenders' contention that the push for regulation comes from the small installment loan companies, who view payday stores as unwanted competition. The solution, says Brooks, is to regulate both the small loan and the payday lenders.
The flaw in Brooks' argument is that small loans are already regulated under the Georgia Industrial Loan Act. The loans can't exceed three years in duration; they can't be over $3,000 and the rates are limited. The payday lending strategy ought to inspire other criminal enterprises to petition the House for legitimacy. Perhaps identity theft rings could benefit from the lesson that if you do something illegal long enough and successfully enough, you can buy a chamber full of champions at the Statehouse.
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