Usury “R” Us!
Myth vs. Reality - Predatory Lending Association
Myth: It is unethical to charge a poor person 100 times the interest rate a rich person would pay.
Reality: We live in a free market society, if the working poor are willing to pay 100 times the interest rate a rich person would pay (e.g. 550% APR instead of 5.5% APR) there is clearly a market need for our service.
Myth: Debt traps are a bad thing.
Reality: Debt traps are the cornerstone of payday profitability. Although the 2 week term of a payday loan traps most people in debt, there are a few customers who are able to pay off the loan on time.
Myth: The government should regulate predatory payday lenders.
Reality: Although it is true that our government regulates some free market activities such as prostitution and drug abuse, payday lending is fundamentally different because it is a financial service.
Myth: Payday lending is comparable to selling yourself into slavery.
Reality: Although there is a market need for slavery, people do not choose to sell themselves into slavery. Free choice is the difference between payday lending and slavery.
Last updated on Tuesday, November 27, 2007
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