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    23 Replies Latest reply on Jan 7, 2008 2:20 PM by Iwrite

    payday lenders

    rayandnay Newbie
      why are there so many, are big banks behind the proliferation of these companies? it seems they keep in a position where you never qualify for a normal loan, only these type
        • Re: payday lenders
          Lighthouse24 Ranger

          There are so many payday lenders because it's a profitable enterprise. No, big banks are not directly behind their proliferation -- but because big banks must obey a more stringent set of federal regulations and follow a more conservative set of lending guidelines, it indirectly allows more private lending operations to exist and fill a consumer demand. Yes, I suppose you could say they are a "dealer" of sorts -- supplying their "junkies" with money instead of drugs, and keeping them "hooked." In 2006, the U.S. Department of Defense defined them as "predatory." Not only had they kept service members from qualifying for traditional loans, they had jeopardized security clearances and deployments, as well.
          • Re: payday lenders
            DomainDiva Ranger
            Payday lenders catrer to a certain financial and immigration status section of society. It meets a need that the big banks are not authorized by regulation to meet. Why would a large financial institution even WANT to expand to meet the need of a small demographic?

            Banks are not in this business...google payday loans and see what comes up. Why would the government change the regulations to allow banks to engage in this activity?

            Why are you blaming the banks? People are responsible for themselves and the choices they make with their money and finances.
              • Re: payday lenders
                rayandnay Newbie
                nobody is blaming anyone, why is it someone raises a question about something in this country which is morally wrong you are either complaining or out of line. if i was in position to give my life for this country my most precious commodity i would be expected to do so without reservation yet i cannot get a loan for 5.00 because my credit score is to low, please explain that. believe me, before it is all said and done people like you will know what it is like to need a hand up only to be told get away from me, just remember you heard it from me.
                • Re: payday lenders
                  rayandnay Newbie
                  nobody is blaming anyone, why is it someone raises a question about something in this country which is morally wrong you are either complaining or out of line. if i was in position to give my life for this country my most precious commodity i would be expected to do so without reservation yet i cannot get a loan for 5.00 because my credit score is to low, please explain that. believe me, before it is all said and done people like you will know what it is like to need a hand up only to be told get away from me, just remember you heard it from me.
                    • Re: payday lenders
                      LUCKIEST Guide
                      Ray, Why did you post two replies??
                      Where are you going with " nobody is blaming anyone, why is it someone raises a question about
                      something in this country which is morally wrong you are either
                      complaining or out of line"
                      Sounds you are campaigning or running for PRES.
                      LUCKIEST.
                        • Re: payday lenders
                          rayandnay Newbie
                          because i have a right to, this is america right, don't be so sensitive
                            • Re: payday lenders
                              Ed O'Gee Adventurer
                              Ray,

                              No need to get snippy. I understand what you mean about getting access to funds. However you can't blame a financial institution for not taking a risk on someone with a low credit score. Banks are in business to make money, just like everyone on this board who owns a business. I would not extend credit to someone whose history says that have a problem paying, so why should you ask a bank to do so?

                              People on this board are generally here to help, so there is no reason to get frustrated with anyone over an inability to qualify for a loan. You need to work on getting your credit SCORE higher, and there is a pretty good article on the site about life after bankruptcy which gives tips on how to raise a credit score, but it takes time.

                              For someone in your position, a loan might not be the right thing at this point. You likely will need an investor, who you feel comfortable sharing your idea and sharing profits with. There are VC's, Angel investors, all sorts of folks who would be willing to give you money to support a GOOD idea that could make them more money. But blaming banks or anyone else who won't give you a loan because of a low credit score is counter productive.
                          • Re: payday lenders
                            DomainDiva Ranger
                            SInce when is it morally wrong for a bank to NOT loan money to someone with a low credit score?

                            Yes this is America, land of the you need to get it going and do it yourself.
                              • Re: payday lenders
                                CorpCons08 Ranger
                                As DD and Ed have clearly stated, banks are nothing more than businesses. As a business, they have the right to do business with who they want or don't want to. They are regulated by the federal government only in that they provide fair practices among all people that walk into their facilities. Their lending does not bend for one person and not the other. They are following the same set of credit policies for everyone.

                                CC08
                                  • Re: payday lenders
                                    Iwrite Pioneer
                                    CorpCons. It has been proven that is not the case. Banks do lend at different rates for different people, despite credit scores being the same. Red-lining has been proven. We know this but choose to overlook it as long as it doesn't effect us. Lending practices have been called into question for years, the fact that no one cares doesn't mean it doesn't happen.

                                    There was an article on the web about the lending pracitces for mortgages, and how even when things were equal African Americans get higher interest rates. All things being equal they are not.
                                      • Re: payday lenders
                                        CorpCons08 Ranger
                                        How can that be when most banks are using an electronic input that approves the loan based on credit score only?
                                        A monitor cannot tell what nationality you are or what race you are.
                                        That is one of the reasons the electronic input came to be.

                                        CC08
                                          • Re: payday lenders
                                            Iwrite Pioneer
                                            I'm not sure. But here is one article. I know it is date October of 2007 but how much has changed in the last few months?

                                            www.nytimes.com/2007/10/15/nyregion/15subprime.html?_r=2&oref=slogin&oref=slogin
                                              • Re: payday lenders
                                                CorpCons08 Ranger
                                                I agree that subprime is wrong. That is also why subprime has collapsed.
                                                There are almost no subprime loans being produced.
                                                However, you call banks wrong for not wanting to do these lower credit score loans.
                                                The subprime mortgage crash cost banks billions of dollars because they created credit for lower credit scores.
                                                Can you blame them for not wanting to take on the risk?
                                                You basically contradicted yourself by posting that article.

                                                CC08
                                                  • Re: payday lenders
                                                    rayandnay Newbie
                                                    you are missing the point, there are things in place to keep certain people down, why else create a law to even the playing field. a loan officer once told me she took two credit reports one black one white, same problems , and the credit score for the black person was 100 points less, i know you want to believe that this is a perfect society, but this country has a lot of secrets, you are fortunately on the right side, you will never have to walk in our shoes. believe you me they will take the risks when things go farther south, and they will
                                                    • Re: payday lenders
                                                      Iwrite Pioneer
                                                      Subprime was not wrong. Variable rates were wrong. The problem was that people who were making their payments saw their payments balloon to a rate that was predatory. No one has claimed that fixed subprime loans were the problem, this is a "variable" problem. And there were fixed subprime loans.

                                                      Contradicted? How so? I said and am saying that lending decisions are based on more than credit scores, and it has been documented. I called banks wrong for not applying the rules the same for everyone. I stand by that. I think subprime has its place, it works in the automobile lending industry because the rates are NOT variable.

                                                      Now, ask me what I think about credit one day and we will really have things going. I think credit is the best marketed product on the planet. People have become convinced we cannot live without it, and this has happened in less than 120 years.
                                                      1 of 1 people found this helpful
                                                • Re: payday lenders
                                                  rayandnay Newbie
                                                  iwrite you should play the lottery today, because you are so right it is amazing, good ole america with all its secrets and this is one of the biggest, and that is why the government had to enact the equal credit opportunity act of 1975, and why there has been 3 successful class action lawsuits using this law. there has to be a reason why blacks still live in the worst neighborhoods, have to go to rent-a=centers and pay 1,000.00 for something that costs the average person 200.00, why payday lenders cater to these neighborhoods, the ultimate reason just take a look at the subprime mess that has ruined this country, and because it now affects everyone it is amazing how our government has jumped to find a remedy. your comments are a breath of fresh air, and believe me as time goes by many more will know what it feels like to be behind the 8 ball.
                                                    • Re: payday lenders
                                                      Iwrite Pioneer
                                                      Thank you.

                                                      But I really wish I was wrong. I wish things were different but they aren't. I have friends who lost their jobs after working 15 - 25 years for a big electronic retailer, who may never recover. These aren't bad people but they aren't you and I, they want to work for someone, not be their own boss. The reality is that they are too old and too expensive for corporate America. That's no one's fault. It wasn't a plot, times changed more rapidly than people could adapt.

                                                      Try being unemployed for three years and tell me what your credit is going to look like? I did it. There were days when the best I could do was feed my family. My savings and investments carried me through for almost a year, freelance kept food on the table and the lights on but not much more. I worked any and all the jobs I could get but we were so far behind that it didn't make sense. Here it is 4 years later and I'm still trying to recover - savings gone, house gone, bank accounts gone. And I consider myself one of the lucky ones. Others lost more, so much more.

                                                      My bank, the one I have been a loyal customer with for over 20 years wouldn't touch me. All the money they made off of me, and when I needed a small loan (less than $10,000) to float my family through it was "no" - it's just business. I had to go to the payday lenders. I hated doing it but we had to live. I paid them back before the interest kicked in. I see how bad they are but at least they were there. Where was my bank?

                                                      I am sorry if this turned into my soapbox, but if you haven't lived it don't dare try to tell someone that they need to get it together.

                                                      That's just wrong, morally wrong.

                                                      I would not have wished this on my worse enemy.
                                                      1 of 1 people found this helpful
                                          • Re: payday lenders
                                            LUCKIEST Guide
                                            Follow the money. There are so many payday lenders because they make BIG PROFITS on short term loans.

                                            A payday loan is a small, short-term loan
                                            that is intended to cover a borrower's expenses until the next
                                            payday. Typical loans are between $100 and $500, on a two-week term and
                                            have interest rates in the range of 390 percent
                                            to 900 percent (annualized).

                                             

                                            You could make 400% on your money legally. Become a payday lender. LUCKIEST