Speak Out: Payday loans make economic sense
Posted: Thursday, May 21, 2015 6:44 pm | Updated: 6:46 pm, Thu May 21, 2015.
By Our Readers
Re “Do what’s right, Alabama, about predatory lending” (Editorial, May 4):
The Star’s editorial board has argued for excessive state limits on short-term loans, restrictions that would only leave Alabamians worse off.
For many struggling to make ends meet, payday loans make personal and economic sense, and the hardworking customers I work with every day find this credit option to be simple and transparent. With its one-time flat fee of $17.50 per $100 borrowed, it’s also cost-competitive, particularly when compared with the costs and consequences
of other options, from a $36 overdraft fee to the risks associated with unregulated lenders.
Restricting this option comes with real consequences. While discussing other states’ short-term lending regulations, the editorial board conveniently overlooks what happened to residents in Alabama’s neighboring states. After Georgia and North Carolina eliminated short-term lending, consumers “bounced more checks, complained more about lenders and debt collectors and filed for Chapter 7 (‘no asset’) bankruptcy at a higher rate,” according to the Federal Reserve.
My company, Advance America, is committed to responsible lending and supports regulations that protect consumers while preserving access to credit. Consumers benefit from more choices, not fewer. Any new regulations must keep this in mind.
Category: Payday loans