Do Payday Loan Borrowers Have Civil Rights Under The Law?
Payday loans borrowers have civil rights. They have got the right to be aware of just how much their loan will probably cost them. They have got the right to return the money they borrowed by the end of the day if they decide they changed their minds. They have the right to know about dispute resolution. The witty thing is they have the right to know so much, that the majority of payday loan places will hand you a couple pages of fine print on your rights and have you sign something at the bottom stating you give up your right to a jury trial and you do so consciously. In spite of the volumes of information payday loan stores give, human find themselves going to payday loan stores and signing on the dotted lines in any case. It makes one wonder whether knowing is sufficient. How could one know and yet decide on something that has been compared to usury? Is it ignorance, lack of interest, or something else altogether that keeps the industry in consumers at such a rate that the business seems to be successful while other businesses are struggling?
To convey the problem raises queries is an underestimation. It's tough to have sympathy for an industry which seems to have thrived while the country is going through one of the toughest economic disaster in recent memory. The payday loan industry has definitely profited, having become in fact, "$28 billion industry nationally, according to the Center for Responsible Lending" (Associated Press, 2007). As the industry develops, it leaves us wondering how human would willingly pay 480 percent. Ray Fisman, in The Dismal Science, raises the question "Do people take out payday advance loans as they're distressed, or because they don't know the rules?" What Fisman almost asks but doesn't is are human stupid or don't they understand that one $500 loan from these establishments potentially costs them $2692 a year? These seem to be the same people who then blog questions like, "Is my payday loan place going to have me in prison? Are these businesses preying then on the stupid?
So far, no one is forcing them to go. Or are they? It has been recommended that our present financial crisis has made it almost impractical for the average individual to obtain a loan in any other way. In response to the push for more stringent borrowing practicing, traditional banks are turning away traditional borrowers. Perhaps it is not a coincidental bond between the push by banks to be stricter and the responsiveness of the fringe industry to grow as a result. Cash loan lenders aren't stupid. Like every aggressive kid, they know there is a limit to how far you could push until you get, proverbially, smacked in the head.
President Obama has made a point of declaring that America, to be economically strong, must be able to have credit. If this is the case, we are looking at a new wave of Americans who have been forced out of the credit game, disenfranchiseed by a banking industry which was irresponsible enough to loan to irresponsible patrons forcing mainstream America to choose an even stupider path.