Re: Payday Lending Part Deux

On Sat, 17 May 2008 22:07:42 -0400 "D.F. Manno" <dfmanno@[EMAIL PROTECTED]
> wrote:

:>In article <lk3u24dbk6tbrnhm681js8j9rrgn45sr9p@[EMAIL PROTECTED]
>,
:> Lisa Ann <lisa-ann@[EMAIL PROTECTED]
> wrote:

:>> John Dean wrote:
 
:>> > Lisa Ann wrote:

:>> >> I don't think we've got anyone from Ohio on this group, do we?

:>> >> The Ohio Senate voted Weds to, effectively, put payday lenders out
of
:>> >> business.

:>"Effectively" is a weasel word. According to AP, "The bill limits 
:>borrowers to four short-term loans a year and caps annual interest rates

:>at 28 percent." Loan amounts would be capped at $500 per loan, or 25 
:>percent of a consumer's base monthly pay - whichever is less.

If they cannot get market returns for the amount of risk, they will close
them
down. Simple business.

You are, of course, free to invest your money in situations where such a
below
market return is expected.

:>> >> To my company, that means we'll be closing down
:>> >> approximately 289 stores and terminating app 1156 people.  It also
:>> >> means that Ohio vendors will lose the $15 million dollars we pay in
:>> >> rent, utilities, repair/maintenance, etc each year.

:>"Nice state you've got here, Mr. Strickland. Be a shame if anything 
:>happened to it."

:>Do you mean your company can't make _any_ money under those limits, or 
:>it can't make the kind of money it is used to making and thinks it's 
:>entitled to continue making? I suspect the latter.

More likely they cannot make a market return based on the risks. 

If they can now make more money making foobars than providing these risky
loans with an interest rate cap, they will move their capital to the
better
business.

:>> >So what kind of interest do you charge on your loans and what's the
typical 
:>> >APR?
 
:>> It's not interest, it's the up-front fee for borrowing money.

:>"A fee for borrowing money" is the very definition of "interest."

Agreed. That argument is a dodge.

-- 
Binyamin Dissen <bdissen@[EMAIL PROTECTED]
>
http://www.dissensoftware.com

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