Hey - interesting article, but it seems a bit retarded drawing a parallel with rape. What's up with that headline?

yeah, i mean, as ruinous as payday lenders are, i wouldn't have made it through my last semester of college without them. $17 out of every $100 was less than the late fee on my rent, y'know? granted, i had to work my ass off and tighten my belt--half a pack of ramen a day, some weeks--but that wouldn't have helped me if i hadn't been able to get an advance on my measly Subway paycheck.

While I sympathize with Brooklyn's point, and moreover I think Brooklyn understates the problem (there is a way to get the money, but it usually involves under the table dealings with someone who will break your kneecaps if you don't pay), I do wonder if we're falling into the trap of the excluded middle: we don't have to set usury rates so low that they put Dollar Loan Center out of business to put them in place and knock out an 806% apr.

It'd require more information about just how often people fail to repay, and what their expenditures are, but just off the top of my head an apr somewhere around 150-200% to those institutions that do not engage in background or credit checks on those they lend money too sounds reasonable, and that would quarter charges on the poor.

true enough.

For what it's worth, the last time I went to Money Tree, they now have the option to pay it off in increments, instead of one lump sum. Wish they had done that 8 years ago.

We've come a long way from the days when all forms of lending money at interest were considered sinful. Of course, that is still the situation with Muslims. For them it is forbidden to lend or borrow money with interest. While I am quite opposed to Islamic teachings generally, and consider them somewhat of a threat to me personally, I wonder if they don't have a point in this case.

Anyways, I'm actually a little short on cash right this second, but look, I get paid on Friday right? Any chance you could spot me like, maybe, $10? I promise I'll get it back to you.

I got stuck in that trap a few years ago, its true, once your in, its hard to actually pay it off and stop using it. I had to take a hard hit just to stop the cycle. A few months ago, I almost thought about doing it again because I was that broke. I thought better of it, sucked it up, and thank goodness never got the loan. I will never do those again.

This is actually what I do for a living (not by choice, but hey a job is a job). It really is a horrible cycle, and I see people get trapped by it every day. Sometimes it's the working poor like you describe, who suddenly have an emergency (car stops / pipes burst / sick child, etc) that they need an advance for. Sometimes, however, it is people that just can't handle their money. They drive a Mercedes and make 10 times what I do per paycheck, but they still need an advance. I had someone once tell me he couldn't pay it back because he lost his money at the casino. I have no pity for people like that.

The only way to get out of the loop (barring some sudden influx of cash allowing you to get back on your feet) is to borrow less money each time. Go down in increments of $50 each time or something. Wean yourself out of the system by paying less interest each successive borrow. Sure, it might take a while, but it will help. A lot of places also allow payment plans, as leavemehere mentioned, but there are insane fees to be able to do that, and certain qualifications that not everyone meets. It's not really a great option, but none of it is.

if you want progress, then no they don't. large scale economic change happens due to investment on the parts of the haves. if you take away their incentive to invest you freeze capital in the hands of the haves and prevent it from cycling down. if their ROI is dropped to zero they won't place their money in banks (no interest returns) which will prevent banks from making loans at all, which stops all sorts of mid and large-size purchasing.

I would also like to comment on the title of this piece. I don't believe it is wise to use the word rape out of it's direct meaning. I work with a number of survivors of rape (I am a psychotherapist). The experience is so devastating, disturbing, scarring as to be an ultimate abuse of the body, mind and spirit. It is a trauma that takes a lot of courage to face and work toward recovery. For this reason, I believe the word should be reserved for the immediate context of it's original meaning. We must be very careful not to re-traumatize those of us who have suffered such an ultimate humiliation and devastation.

It's not quite that simple, however; though they can't lend or borrow with "interest," they're certainly allowed to make a profit, and some of the techniques they use to do so would make me think twice.

In Canada there's at least one class action usury suit against payday loan companies, and they have a really good chance. We have very liberal methods of calculating interest as an annualized percentage rate, though.

This post raped me.

well, you were asking for it, dressing like that.