Payday lenders distort picture

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Payday lenders distort picture
2006-12-29
Darrin Andersen, president of the Community Financial Services Association of Alexandria, Va., quoted a lot of irrelevant statistics in his defense of payday loan companies. Mr. Andersen attempts to justify the $4.2 billion in "lending fees" these leeches extract from the least capable segment of our society by citing the $40 billion in credit they receive. If these were both annualized figures, the 10.5 percent interest would be reasonable. But most of these loans are for only a few days or weeks, often resulting in annual percentage rates in the triple digits. Some of the other figures Andersen cited, e.g., late bill payment fees and insufficient funds fees, are exacerbated, if not created, by problems associated with the payday loans. The old joke that you can only get a bank loan if you don't need one is pass given the ready availability of credit unions which go overboard to accommodate legitimate borrowers....
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