Biggest banks stepping in to payday arena

  • Article by: CHRIS SERRES , Star Tribune
  • Updated: September 9, 2009 - 9:08 AM

The big guns' entry into payday lending may finally bring a fringe financial product out of the shadows and into the financial mainstream, despite howls of protest from consumer groups and the risk of tighter regulation.

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lothlornSep. 9, 09 9:55 AM

LOL, fractional Reserve Banking. LOL

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dedo112Sep. 9, 0910:53 AM

If people do not like these services.....I have a solution, do not use it!

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EbuddySep. 9, 0911:31 AM

lothlorn - what does FRB have to do with this article. These types of credit products provide a VERY important service that many people successfully utilize, without ill effects. The interest rate is a bunch of hooey because it's annualized. It's a fee and most people who utilize these are happy to pay a fee later to have access to their money now.

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ZarephethSep. 9, 0911:32 AM

Our economy requires everyone to get money. If you run out (generally because you're at the bottom end of the wealth spectrum) you have to beg, borrow, or steal to get what you need. As a consequence people borrow - which makes the situation worse.

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magicmanrexSep. 9, 0911:58 AM

...just another way to keep the poor, poor. All one needs to do, is go to the areas where most of the PayDay stores are located---are they in the affluent suburban areas??? NO! Most are located in the cities, in the most depressed areas. Many of these people that utilize these PayDay loans are on the bottom rung of the earnings scale, and have no idea they're being raped on the charges that are assessed..........and then, they're on a cycle of having to pay the interest charged, and in order to do that, they keep their loan going. The PayDay centers make out like bandits, and the people that live in these depressed areas will never get a handle on their assets. Sure, you can say, "well then, don't use it!"---but for many, when they see this as an option, and their home is being forclosed on, or the utilities shut off, there is no other option, then to get the "quick" money---which forever entrapts them. I live on 15th and Chicago, and have not used them, but have watched the stores, and who frequents them, and the look of hopelessness on the people's faces, and it's sad. All one needs to do is to drive to one of these places and witness it for themselves----the interest they charge is criminal, and should be outlawed, bottom line----they're helping no one, except themselves, lining their pockets and laughing all the way to the bank.

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initech55Sep. 9, 0912:28 PM

I just went to the payday website and for Minnesota if you take out a $350 loan for anywhere from 10 to 30 days, it costs you a whole $26. Even though the rate is high (because of the short term nature), the cost seems pretty reasonable. Leave it to the Strib to take a nominal profit and couple it with a high interest rate to get = SENSATIONALIZED news!!!!

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bottomlineSep. 9, 0912:46 PM

I just love you Liberals ...the answer to "everything" is "banning" or "outlawing" everything. What you are "trying" to say is that "we need more GOVERNMENT", "we need MORE GOVERNMENT". The battle cry of every Liberal. We don't need more "government" ....we need more financial understanding among the poor. More understanding of how money works. A "payday loan" is not bad ..what's bad is what people use them for. It's a great product ....if used properly.

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magicmanrexSep. 9, 0912:54 PM

.........I just love all you conservative right-wing nuts........you have all the solutions, like educate the poor on finances, but don't want any tax dollars or any funding from citizens to help in the process. So how do they learn??? It's not a great product, and should NOT be located in these poor city areas. Let 'em put them up all over the suburbs, and see if their business flourishes. Guaranteed, they'd shut down within months due to no business.

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initech55Sep. 9, 09 1:11 PM

you say "but don't want any tax dollars or any funding from citizens to help in the process. So how do they learn" - A poorly thought out statement. Truth is they already get my tax dollars with the public school system. Of course your response is, "but the public school system has failed these kids". I would say, no. It's not the public's responsibility to make sure kids learn. It's their own personal responsibility. Or isn't it?

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magicmanrexSep. 9, 09 1:21 PM

.......you're absolutely correct on the school systems failure on educating our kids on finances, I totally agree. I don't think that will ever be a big part of the curriculum, so they will continue to be uneducated in the ways of finance. Is it part of their own responsibility, when they don't even have a grasp of just the basics??? It's a catch-22, really. What makes me really upset, is that the majority (not all), but the MAJORITY of these PayDay centers are located in the mostly poor areas of the cities---why is this, do you think??? Couldn't possibly be that they (the PayDay businesses) know that they can prey on the poor, and have a captive audience. What's the solution??? To educate the poor, of course---but I honestly don't have the answer on how to do that----but until that happens, these businesses, since they're so earnest on wanting to provide this service to individuals, should only be allowed to operate in the affluent areas----then let's see how fast they close. They're a dispicable business, preying on the uneducated and poor---I don't know how they even sleep well at night.

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