Comments on: Payday Lenders Closing Doors After Election
By BarBarAhman on 11-16-10
“Since the lenders were allowed to charge fees worth 25 percent of the loan…”: With mortgage loans, people often end up paying 100% of the principal to the big banks by the time they’re done, in interest, and that can be hundreds of thousands of dollars. Why is it such a big deal when these guys charge people $13 on $100?
While I agree that habitually taking out pay-day loans is self-destructive, it’s typically a sign of much deeper problems in a person’s life. To those who might need to do so in an emergency and to these business owners and employees, this initiative is just mean.
Let’s stop trying to mind what is other people’s business and rescind this initiative!
What a shame that we can pass a mean-spirited initiative like this in Montana and can’t even pass a pro-life initiative.
By Craig moore on 11-16-10
Consider the alternatives: http://docs.google.com/viewer?a=v&q=cache:ZfIQG105VxAJ:www.cfsa.net/downloads/Highlights_NCUA.pdf+payday+lending+loss+history&hl=en&gl=us&pid=bl&srcid=ADGEESi_grdOBgkjGCHEnphuFA4_cUdQyy9QjiVkyUJCKPlzJeC98tT4fvEh2sa2Tq99vV4V0ZpoIo7F8mbrjVbCZSw1dpPvvfIrR4ctyc8KR33iIYga7Y5nA2BUnVsgXBT6D1_Z17BI&sig=AHIEtbSMuMdwBt8pu-l82xV0bIS7NkxkLA
===quote===
Payday loans can be cheaper than the alternatives, including credit union “courtesy
pay”
“Let’s consider some alternatives for the working mom who is short $100 until payday, 14 days from
now. She could get a $100 payday loan, pay $15, and the APR for that two week loan would be 391
percent. She could also choose to write a bad check and pay an average of $48 in NSF and
merchant fees. That would be a comparable APR of 1,251 percent!”
“Even if she has courtesy pay with her credit union, the average fee is $25, or an APR of 650
percent. Another option for her might be to not pay the $100 minimum balance due on her credit
card, resulting in a $26 late fee—678 percent. If she chooses to not pay her $100 utility bill which
may result in a $50 late or reconnect fee, that’s a comparable APR of 1,304 percent!...The
argument can be made that by securing a payday loan to solve her cash flow needs, this woman is
taking a proactive approach to her financial dilemma.”
===end quote===
Then, of course, there are the pawn shops. What exactly was the fire that was put out with this initiative????
By kalispelling bee on 11-16-10
“A lot of people, their payments are jumping up and they’re getting angry,” Lefeauvre said.
That quote just stands there, without explanation. Are their payments increasing because they have to pay off their loans at an accelerated pace? It says they will be open for another six months to collect interest. And isn’t their interest lower now, though?
I’m missing something. Can someone explain?
By kalispelling bee on 11-16-10
That makes sense, sl2888. Thanks for explaining.
One more question: Is it the initiative that gives customers just six months to pay off their loans or is it because businesses are closing?
By By and By on 11-16-10
I don’t think voters should have a say in how much a business charges for it’s services. If you get the loan then you have no right to complain about the high interest or fees. They knew those were there before they got the loan. This is one dumb law, by lot’s of misguided voters.
By MT GUNNY on 11-16-10
Ive used the service in the past and was glad it was there, I feel sorry for those that cant use it now. I hope they fair well in the years to come. I predict a increase of bankruptcies by 50%. If you are a person who voted for this change, you should be ashamed of your self for ethier being dumb enough to use it and abuse it, or not knowing how its helpfull to someone that has a emergency and cant get a Loan from a bank.
By payday on 11-17-10
It was clear from the beginning that this initiative was designed to put lenders out of business and people out of jobs. There is no way lenders would be able to cover all business costs at 36% APR on SMALL-DOLLAR SHORT-TERM loans. As a result, customers are left with fewer short-term credit options such as credit card fees and overdraft protection. These options are also less desirable, because APR on late credit card payments and overdraft protection is higher than what the lenders charged on payday loans.
By ICallB.S. on 11-17-10
Perhaps if you imbeciles would stop running your debts sky high, you wouldn’t need short term, high interest loans. If you make less than $30,000/yr., you don’t get to own a new truck every 3 years. You don’t deserve to live in a $300k home and you don’t need the latest cell phone or video game system. You all complain about the government mortgaging our future with reckless spending, but you practice the same financial stupidity in your personal life. I am borderline poverty level income (according to the gov’t) but my house is small and my vehicles are ALL over 10 years old. It’s what I can AFFORD!!
By dawnelise on 11-17-10
To ICallB.S.: Bravo!!!
I have an acquaintance who uses these loans, and her spending habits never cease to amaze me. Her cigarettes alone cost her $180.00/month; cell phone with all the latest apps: $75.00/month; a video every night: $30.00/month; Starbucks daily: $60.00/month (conservative estimate). The list goes on, but you get my drift. I have ceased banging my head against the wall, however; no amount of reasoning and logic will get her to change her ways.
I realize that not all short-term/high interest loan customers are like her, but I think a concrete example speaks volumes about an individual’s (warped) priorities.
By pondering on 11-18-10
I think way too many people voted against Payday Loan Companies thinking that they were voting away a certain lifestyle. Gosh, maybe we could vote away irresponsible driving as well. This is a service that fulfills a need in our community and you cannot vote away a need. It is up to the individual if he or she chooses to utilize the Payday Loan Companies. It is not a crime, it does not hurt the general public and it is optional for the individual to walk through the door. Maybe someday you might need to borrow $100. for a fee of $17. and it might be the only option out there.
By Vud on 11-18-10
A quote from the underlying white-paper referenced in Craig moores link. (Which was written to entice CU’s to develop a more competitive product than those offered by PDLs…and an interesting read.)
“A study by the Colorado Uniform Consumer Credit Code found that in the first six months of 2007, almost 17 percent of payday loan users in that state were indebted every day.” (4Ref: CO home ownership was ~70% in 2007)
“This 17 percent accounted for over 31 percent of the payday loan volume. If they borrow once, they are likely to borrow 8 to 12 times a year.”
“In fact, the study found that those with 12 or more loans in the preceding 12 months accounted for 66% of the total loan volume.”
These are not borrowers who are taking ’ a proactive approach ’ to their financial dilemma.
By dawnelise on 11-18-10
I neglected to mention that my acquaintance is also on disability….and her actions DO hurt the general public.
By Roark on 11-20-10
This law is madness and ought to be overturned by the MTSC. Personal opinion and/or preference is not proper or objective grounds for outlawing/mandating percentage fee’s a business may choose to charge a person who ELECTS to pay the sum. Competent individuals would never stand for the hyper regulation of private business or personal lives, and they shouldn’t support them either. Here-in lies the moral problem with the Initiative process; almost anything can be set to a majority vote…you may be next. There is a massive lack of REASON in the USA - MT being part of that vacuum too - and its effects will cost us dearly, like I-164 our liberties will be eroded away by irrational emotionalists.
By Yudamni on 11-20-10
C’mn Man the election is over. Thank God we got this one right because the people that use these payday loan places do so because they cannot help their own stupidity, when it comes to handling their money. We do not need to protect them. However we do need to protect the parents, relatives, and friends of these idiots who they go begging to when they cannot pay the stupid loan back. I have helped pay several of them off and I hate it. Gambling was really the support of these Loan Sharks. OH YEA, GET RID OF TESTER TOO!!!
By dawnelise on 11-22-10
Roark—I see your point. But perhaps my “irrational,” “emotional” opinion is due to the fact that I have bailed out two friends who have used these loans and could not pay them back due to the astonishingly high interest rates. (I was shocked when I found out these places even existed, and actually phoned one to question the interest rate—silly me.) In a perfect world, “competent individuals” would take responsibility for their actions, and pay back the loan as soon as possible. In reality, it seems many of these folks find themselves in an ugly, endless cycle of foolish financial choices out of which there is no rescue save the generous friends and relatives who listen to their sob stories and pay off the loans. I have learned my lesson the hard way, and I guess it’s their turn now.
(And frankly, any semi-intelligent person knows these loan companies DON’T WANT people to pay off their loans right away—how else are they going to make a profit? Money is always the bottom line.)
By Roark on 11-23-10
Just as an astronaut in outer space would never use emotions or opinions to make life or death decisions only facts, so neither should individuals make such decisions regarding their liberty and freedom in regards to laws.
By dawnelise on 11-23-10
Unfortunately, not all of us are rocket scientists. 
The views expressed in the comments section do not reflect those of the Beacon.