Stealing Legally

Hi Everyone,

I was reading the newspaper a few weeks ago and again I found an article that blew me away.  Highway robbery is a very mild analogy to what I found out. Pew Charitable Trusts did some new research and wrote a report regarding the nation's highest interest rates for payday loans. Keep in mind, that payday loans are used a lot by low income wage earners who desperately need a small loan, when unexpected expenses occur, i.e. car repair bills. So that is why I was blown away by the interest rates that are charged.

So if you were to guess how high you think these payday interest rates can get, what would be your guess? Hold onto to you hats. Somehow all of these rates are legal. The state with the highest rate is Idaho with a rate of 582%! Yes you read that correctly, 582%. South Dakota and Wisconsin are tied in second place with 574%. Then comes Nevada, 521%, Delaware, 517% and Utah, 474%. Some other states that have the lowest of the high interest rates are: Maine, 217%, Oregon, 156% and Colorado at 129%. Fifteen states either ban payday loans or cap interest rates at 36%. Without a limit on interest rates, competition among lenders does not tend to lower rates much, according to Pew's new research.

Now I understand that these loans are made without collateral, other then having a weekly paycheck, to people who most likely don't have anywhere near a good credit score. So the people who need these loans the most, due to their financial circumstances, will always pay the highest interest rates. I am not sure how many of these loans go unpaid, but rates up to 582% seems very unreasonably high, grossly unfair and seems to me to be a legal form of stealing from people and a bonanza to the lenders. But somehow the rates are legit and people continue to use these payday loans.

Til next week.

Peter