The Old Testament is replete with references condemning taking
advantage of the widowed, the orphaned, and the downtrodden. We can readily
understanding why ancient Israel that usury was more than an ethical, it was
viewed as a criminal activity. Those who are the most vulnerable, the least
educated, the least capable of understanding business matters, and those in the
most desperate straits financially, are prime prey for wily people.
Payday loans are a form of usury. I am aghast how those who
posture themselves as running for office on “biblical values” look the other
way on these loans. Payday and title loans are enticingly packaged as a service, but they
are anything but a service for anyone but the lender as the loan terms are
designed to keep as many people as possible “paying off the loan” as long as
possible. Annual interest rates in excess of 40% are not uncommon, sometimes
even greater than 50%. That these firms tend not to freely publish their rates on the net speaks further volumes as to the predatory nature of their loans.
There is an ad running that targets those who are caught in
the payday loan trap by enticing the victims to take out a loan with them so as
help them retire their payday loan. The firm is offering to rescue usury
victims with another usury loan with an annual interest rate that is excess of
89%.
The ad offers quick loans of $10,000 with payment plan over
84 months at a rate of 89%. The victim would be paying $751 a month. The
principle would be recovered by the lender in 14 months, the remaining months
are all profit. Comparing this to the common new car loan rate of 6.9%, a
$10,000 loan would have payments over 84 months of $150.43. A rate of 26.9% (a high
side credit rate) would have payments of $265.38 over 84 months.
That these outragious predatory loans all permitted speaks volumes about the nation's values.
