Opinion: Too Good to be True? Payday Loans an Exercise in Greed and Irresponsibility.

October 29, 2008
By Gary Smothers
Columnist

There’s a $700 billion buyout that has us “real people” upset. However, it’s not just rich guys who are to blame, but ourselves as well.

Take a drive down Wabash or MacArthur Boulevard and see the error of our ways. Lining the east side of Wabash, they sit bright and inviting, their neon colors calling out to us like the lit window of a bar to a drunk. They sit there in their tacky colors, lining the street of their strategic location which just so happens to be along the way to the West side.

13 of them-- an unlucky number. 13 predatory lenders waiting to suck you into their trap. “Get cash now!” No Credit Check!” “Everyone is approved!” Or, as the website for Rush Payday proclaims with a wink to all you would-be spenders, “Chances are if you need money for ANY purchase … you may need a payday loan.”

Pay day loans, title loans, emergency loans, mortgage rescuers…

I’m no financial expert; I’m proud when I balance my checkbook. But, it’s not hard to see the problem right here before us. Money. Money now. That
“American Dream” at any cost.

Payday loans (a generic term for many predatory lenders) want to help. Don Carlson, executive director of the Central Illinois Organizing Project, elaborates on the cost of our friendly legbreaker lenders. “Because these
companies use a loop hole in the law the average interest rate is probably 300-400%,” he said. Thanks for the bail out, Lenders.

And Americans are taking advantage of predatory lenders. Carlson agrees that, much as these lenders tout, most people use such high interest loans for unforeseen disasters, such as medical expenses and unexpected bills.

But here’s the rub. These lenders won’t accept a partial payment. That’s why they encamp so closely together. To pay off Lender A, walk across the
street to Lender B, who is glad to deposit cash into your checking account to pay lender A. The trap.

Unfortunately, they seem to be targeting students. Carlson, clarifying UIS as an exception due to its distant locale from town, states that quick loan shops have sprung up near Illinois State, Millikin, and Wesleyan Universities.

So what does the future hold for us? How can we change things? Look towards our government?

Not so fast. According to the ProgressIllinois.com, Governor Rod R. Blagojevich accepted more than any other politician, $466, 750, from payday loan contributions. In fact, our politicians have received more money from payday lenders than anywhere else in U.S.

So what are we to do?

Drive past these stores. Get involved in an organization such as the aforementioned CIOP who had Advance America shut down through picketing recently. Save money for disasters. Have patience for the “American Dream.”