I once worked for a man, a Republican, at the Department of Financial Institutions that always referred to the payday loan industry as “snakes”. He was right. Yesterday the House tried to round up a few of the snakes.
From the Courier-Journal:
The House passed a bill yesterday to increase oversight of Kentucky's payday loan industry over objections of some lawmakers who argued it might hurt small lenders.
But Rep. Johnny Bell, D-Glasgow, the sponsor of House Bill 500, said it would place minimal restrictions on the flourishing industry that offers high-cost, short-term cash loans to borrowers.
"What I am trying to do is protect the consumers," said Bell, who fended off a last-minute amendment by Rep. Kenneth Upchurch, R-Monticello, to turn the bill into a study of the payday loan business.
Will this bill actually become law?
No, David Williams is going to kill it, again from the Courier-Journal:
Senate President David Williams, R-Burkesville, said yesterday he hadn't seen the bill and said the Senate was busy with other matters, including the budget.
"It's getting a little bit late in this session to pass very many House bills," he said.
Bell is trying to protect consumers from payday lenders that play loose with the law but he is also trying to protect consumers from themselves.
Though people aren't supposed to have more than two loans at a time, research shows some have multiple loans from different lenders and fall behind when they can't keep up with the payments, Bell said.
But the state now has no way to track that, and lenders say they rely on the word of their customers that they don't have more than two outstanding loans, he said.
The sad truth here is that regardless of how many limits are placed on this industry it is consumer driven and it will still victimize its’ customers. Whether some guy in a strip shopping center collects the money or two guys with no necks corner you in an alley the financial result is the same.
This is just another example of government cleaning up what is really a crime, making it look pretty and allowing it to take advantage of the citizens of the Commonwealth.
This payday loan industry is just Loan Sharking with a shell of acceptability just like the Lottery is the Numbers Game run by a state contractor.
Regardless of the limits put on this industry, even if it is made illegal in Kentucky, people will still seek out this service either in the shopping center or a back alley.
Of course if casino's are approved in Kentucky we could franchise out a payday loan operation at each location, think of the money the state would make.
I'm sure Davey would have used the service:
As a means of collecting the gambling debt Davey owes them, Tony and Richie Aprile have been overseeing the purchase of merchandise for Davey's sporting goods store -- and then taking the goods for themselves. The good news for Davey is that he will finally be free of Tony and Richie; the bad news is he'll lose the store, his savings and probably his family.