Thoughts 05 Jan 2007 03:04 pm
Payday Loans
Congress has capped loans to active military personnel at 36% apr, including all fees and anything like loan insurance.
They have banned title and payday loans entirely.
The sponsers of the amendment sited this instance:
An active duty E-7 — sergeant first class — assigned to Fort Jackson.
This rank earns between $55,000 and $72,000, depending on years of service and other factors.
The sergeant had two payday loans worth $1,862, a $37,550 car loan, and two military installment loans worth $15,000. He could not make all the payments. Ultimately, after he was harassed by debt collectors, his unit intervened, the report said.
This sergeant apparently has no concept of a budget.
As I see it, the problem with this example is that his payday loans totaled less than $2000 of a total of $54,412 and as I understand the new law, he could still have gotten himself $52,412 in debt.
They make no mention of mortgage or rent or any other expenses, so with this example they are manipulating the figures to place blame where they want it to appear.
I doubt that the sergeant needed a $40,000 car, but he was the example they chose, and was held blameless for his own actions.
This bill is typical of congress, they fail to address the problem, and instead harm those who are responsible and might need a small loan for a couple of weeks.
Those who cannot or will not control their spending, will always have money trouble.
Of course not everyone with money problems, is to blame for their situation, and most of those cannot be helped with a short term loan, but for those times when a small loan until the next payday would help, the military is now s.o.l.
And there will always be a guy at the bar who would be more than happy to help…for a price.
No matter how well intentioned, you cannot legislate morality, much less common sense.
on 07 Jan 2007 at 6:49 am 1.Egore said …
I do believe that you are correct in a couple of your statements. first congress as anyone else who is trying to make a point will always twist their ideas to a one sided angel. The other is that seldom do we ever attack the real problem. If we want to look at the real problem in america lets take a look at our debt. We as Americans have no idea how to save or why to save!! We are however experts at buying things that do not effect our lives!! the average american has how much in credit card debt? (By the way make a late payment to your credit card and see what your APR percentage is until you pay the card off!!) if you want to look at something interesting. Look at the amount of debt hte United States has. Look at who the debtor is (China) look atthe spending and saving habits of the U.S. and then look atthe same for the Chinese. You will quickly see who will be the World power in only a short few years!!