Pay Dirt Not Struck on Payday Loan Limit

Pay Dirt Not Struck on Payday Loan Limit

Commentary by Sanford D. Horn

March 7, 2008

That a bicameral and bipartisan vote in Richmond would attempt to stem the tide of the increasing epidemic of survival via payday lending, is akin to bandaging a bullet hole with scotch tape.

Make no mistake, the Virginia legislative bodies did not overreach in their 91 to 9 House vote and 37 to 2 Senate vote to reform the payday lending racket. Yes, a racket, because while I am an avowed capitalist and support private enterprise, these institutions are nothing short of usurious, parasitic degenerates preying on some of the most vulnerable members of society who probably never learned to budget or live within their means.

The votes call for a limit of one loan at a time by borrowers, who must produce a paycheck for such loan eligibility. Borrowers will also be limited to the number of loans they may procure throughout any given year and be provided a greater period of payback time.

The annual rate of interest on such loans will be capped, yes, capped at 36 percent with additional fees to boot. Fees, calculated similarly to an interest rate tally up at 391 percent – simply unconscionable.

Actually, the Commonwealth of Virginia did not go far enough, for although it is not the job of government to restrict free enterprise it does have a responsibility to protect its citizens. But, there is a bigger picture on the horizon.

The payday loan industry manifested itself due to a symptom of a grander illness – living within a cycle of perpetual debt. This is a disease perpetuated by the miserable example set by the federal government, who, regardless of the party in power, spends uncontrollably, believes in deficits and also believes the cure is to tax the people more and more in order to pay for some of the most moronic and innocuous programs.

The citizenry, mimicking the government, spends likewise – not budgeting appropriately, not prioritizing expenses and certainly not saving for retirement or a rainy day. Sad to say, for too many people, it’s pouring – now.

Start with the little things. If you smoke, stop. Drink alcohol, cut back or stop. Eat fast food, stop. These are not necessities, will save money and improve health, thus keeping medical costs down. Unable to make the rent payment, don’t go out to dinner and a movie. No, I am not a member of the food, beverage and substance police. Knock yourselves out – but take responsibility when you can’t make ends meet.

Don’t fall prey to the payday loan hustlers. Create a budget, prioritize expenses, cut back on your own and put these bloodsuckers out of business.

Sanford D. Horn is a writer and political consultant living in Alexandria, VA.

[This column appeared in the Alexandria Times.]