Over time I've noticed an abundance of payday and fast loan type businesses turning up. Sometimes they exist in areas where there's a larger money economy. Often in parts of the city where people do not have regular bank balances talk tiny English and do not trust banks, or where less than economically savvy folk hang their hats. They would not do very nicely with a standard deposit account because quite frankly they can't balance a check book. Whose fault is this, is there someone to blame? Why has this venue did very nicely while the regular banking sector taken such a success in this last economic recession. Yes, let's discuss all this if we might.
Many years back, I had an acquaintance who started a payday loan business and a pawn shop. I used to provoke him and call him a loan-shark. He strongly defended his establishment as just, fair, and claimed free-market standing. He said he didn't hold a gun to anyone's head to bring in their personal items or take out pricey consumer loans, they actually did it by choice and I for one who loves liberty, freedom and choice should respect this. Yes, I understand that debate. Still, when you see too many of these types of companies in the town, well, you know; there goes the neighborhood as one says.
I've always noted that they attract the wrong component. But perhaps that is because that type of citizen may not be able to use the ordinary banking system, for who knows what reason. Perhaps, previous private choices they have made, who knows, nevertheless, my findings do stay true. In neighborhoods with a sufficiency of spirits stores, one-dollar stores, tattoo parlors, and bars, we always see the hackneyed payday loan conglomerate in a strip center nearby, often more than one. Yes, it has to be a good enterprize model, even with the bullet proof glass and often less-than-desirable waiting in line or loitering out front.
Then again as my past acquaintance asserts; who the hell am I to judge? In wealthier suburbs you do not see a lot of payday loan companies truly, sure there are a few , but in the inner city or poorer areas you see them in each sizeable shopping mall and near areas with masses of low rent apartments. There are more issues with all this, you see many people go to cash checks in these sorts of places, and the company takes a serious fee for doing hence sure there is risk concerned for them, but their financial model allows for that too. Folks not paying taxes, working under the table, getting occasional checks - cash those checks at these places.
It looks we have got a difficulty with purchaser credit these days. Visa Card firms make a lot of money off those with huge infinite balances and impose interest rates which are insanely high. Banks can't charge that much for their loans, as they appear to be regulated, but somehow these firms can thanks to their lobbying power. The same is right for payday loans, that is the same ballpark I'd put them into. Let's accept it poor folk make poor choices, frequently they do not have many decisions, but choosing to use a conglomerate like one of these is another unwise decision on top of whatever decisions led these folks to this private business reality of theirs.
The WSJ has done a bunch of articles over the years of how the money economy exists, how the IRS is trying to cut back on it, and how payday loan corporations and pawn shops have sprung up to meet the free-market desires of those individuals that are playing in a base kingdom of our economy. The growth of both the money economy and these sorts of conglomerates has truly grown over time.
Additionally,despite what my acquaintance has to say of all this, I don't find that a positive development. It just perpetuates industrial enslavement, high IRs on short-term borrowing, and increased illegal activity and minor tax evasion issues. Hence yesterday, when sitting at Starbucks overhearing a chat, somebody said; "I need a pay day loan quick," I thought to myself; "no he doesn't" that's just a poor non-permanent business decision, which is probably a confirmed habit of his, and why he is still poor. Please consider all this and think on it.
Many years back, I had an acquaintance who started a payday loan business and a pawn shop. I used to provoke him and call him a loan-shark. He strongly defended his establishment as just, fair, and claimed free-market standing. He said he didn't hold a gun to anyone's head to bring in their personal items or take out pricey consumer loans, they actually did it by choice and I for one who loves liberty, freedom and choice should respect this. Yes, I understand that debate. Still, when you see too many of these types of companies in the town, well, you know; there goes the neighborhood as one says.
I've always noted that they attract the wrong component. But perhaps that is because that type of citizen may not be able to use the ordinary banking system, for who knows what reason. Perhaps, previous private choices they have made, who knows, nevertheless, my findings do stay true. In neighborhoods with a sufficiency of spirits stores, one-dollar stores, tattoo parlors, and bars, we always see the hackneyed payday loan conglomerate in a strip center nearby, often more than one. Yes, it has to be a good enterprize model, even with the bullet proof glass and often less-than-desirable waiting in line or loitering out front.
Then again as my past acquaintance asserts; who the hell am I to judge? In wealthier suburbs you do not see a lot of payday loan companies truly, sure there are a few , but in the inner city or poorer areas you see them in each sizeable shopping mall and near areas with masses of low rent apartments. There are more issues with all this, you see many people go to cash checks in these sorts of places, and the company takes a serious fee for doing hence sure there is risk concerned for them, but their financial model allows for that too. Folks not paying taxes, working under the table, getting occasional checks - cash those checks at these places.
It looks we have got a difficulty with purchaser credit these days. Visa Card firms make a lot of money off those with huge infinite balances and impose interest rates which are insanely high. Banks can't charge that much for their loans, as they appear to be regulated, but somehow these firms can thanks to their lobbying power. The same is right for payday loans, that is the same ballpark I'd put them into. Let's accept it poor folk make poor choices, frequently they do not have many decisions, but choosing to use a conglomerate like one of these is another unwise decision on top of whatever decisions led these folks to this private business reality of theirs.
The WSJ has done a bunch of articles over the years of how the money economy exists, how the IRS is trying to cut back on it, and how payday loan corporations and pawn shops have sprung up to meet the free-market desires of those individuals that are playing in a base kingdom of our economy. The growth of both the money economy and these sorts of conglomerates has truly grown over time.
Additionally,despite what my acquaintance has to say of all this, I don't find that a positive development. It just perpetuates industrial enslavement, high IRs on short-term borrowing, and increased illegal activity and minor tax evasion issues. Hence yesterday, when sitting at Starbucks overhearing a chat, somebody said; "I need a pay day loan quick," I thought to myself; "no he doesn't" that's just a poor non-permanent business decision, which is probably a confirmed habit of his, and why he is still poor. Please consider all this and think on it.
About the Author:
Monica Petherbridge is risk manager, doing debt consolidation and corporate or company loan. Graduated with a honours in finance and has an engaging animal for a pet: a parrot named Ginko.
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