Why More Lawmakers Are Supporting Payday Loans
Many of us know all too well the impact that strict legislation has made on our ability to obtain fast cash
. Thankfully, there are some lawmakers that are changing their minds when it comes to payday lenders and the purpose they serve in todays society.
Payday loans have been under scrutiny for many years now, as many legislators are attempting to limit their availability. Although each state varies on their views of payday advances and the regulations and laws that come along with them, the general consensus has been that they have not been financially beneficial for many borrowers.
However, what many legislators have failed to recognize is that some people may have no other options, and that often times, the fees and interest rates charged by banks and credit cards far surpass those fees charged by payday lenders.
The Advantages of Payday Loans
As a result of the above mentioned facts, there are some lawmakers who are looking into the advantages of payday loans. Kathleen Curry, D- Colorado, for example, is questioning the proposed legislation introduced by Denver Democrat Mark Ferrandino. Gunnison is against the legislation, as she voices concerns over the economic impact of thinning the payday loan industry.
Some of the concerns associated with the proposed legislation to limit payday loan companies are that closing many payday lenders will: (a) further hurt the economy and create more unemployment; and (b) leave many individuals with little options for securing short-term cash.
Recognizing the Value of Payday Loans
Many advocates in favor of payday reform fail to recognize that payday advances do have their place in the economy, provided individuals use them responsibly. In other words, there may be many ramifications that lawmakers simply arent considering in the Colorado proposed legislation.
There would be a great deal of people laid off if lawmakers had their way and closed down many payday loan companies. For a teetering economy, this could be detrimental to any state that chose to close down payday loan companies.
The Importance of Payday Loans
Many lawmakers are also failing to realize that if payday advances werent available, many individuals would soon find themselves late on credit card bills (which means a surge in fees and interest rates) and overdrawing their bank accounts. In fact, many bank fees far surpass payday loans in terms of interest rates.
Payday loans, for example, average between 300 and 500 percent in annual interest rates, but bank fees can top these amounts, particularly for bounced check fees.
Instead of leveraging strict laws and regulations on payday lenders, lawmakers should perhaps be questioning the outrageous fees charged by other institutions. The fees charged by banks often go overlooked by lawmakers who are putting the spotlight on the fees and interest rates charged by payday lenders.
In the end, it is really about an individuals right to secure cash in the manner at which they deem worthy. Many legislators are now recognizing that payday loans do play an important role in todays economy.
by: Janet Gaither
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