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16 April 2008
The Bank Squeeze
It does not matter where you look or what street you go down, banks(sarcasm)are everywhere. Oops,
I mean Payday Loan Stores are everywhere.
Banks are trying to squeeze more profit through legislating the demise of the payday loan industry. Why
on earth would the banking industry want to get rid of an industry that borrows money to people they
won't?
The answer is simple. FEES
Economists with The Federal Reserve of New York recently did a study that gives us a notion of their motivation.
The study was focused specifically on Georgia after a ban on payday lenders was levied. Chapter 7
bankrupcties were up nearly 7 percent and bounced check fees grew by 36 million.
Another study conducted by George Mason University and Colby College supported payday lending as a
financially useful tool. It also concluded in their fixed environment, a 31 percent increase in
financial survivability with payday loan access.
I just do not think it is right to allow one part of an industry to legislate another part out of
business. Payday Loans and their availability to everyone should be left unhindered. Let the marketplace
decide.
Seems to me the people would rather pay the payday loan store a fee than a bounced check fee to the bank.
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