Should government regulate payday lending?
Regarding Tim Miller's May 6 Opinion piece, "Ban payday loans? Big mistake.": Mr. Miller's willingness to assume borrowers' and lenders' responsibility is misplaced. As the subprime lending crisis so well illustrates, many borrowers are prone to abusing their credit and to borrowing irresponsibly, and many lenders are (or at least were) only too happy to accommodate them.
Which is more paternalistic and less desirable: government's regulating potentially predatory lending practices or its bailing out distressed lenders and borrowers at taxpayers' expense?
In response to Tim Miller's recent Opinion piece on banning payday loans: Critics of the payday advance industry claim to be representing the best interest of the consumer, yet they want to limit the already small number of short-term credit options available. Many of these critics have never taken out a payday advance before, nor ever needed short-term credit, yet they know "what is best" for everyone. Payday advance customers have strong sentiments against the government limiting their access to these advances. They want to be able to make their own financial choices.
Based on the reasons customers choose payday advance, limiting their use would, in most cases, drive them to more expensive and less desirable alternatives that they had previously tried to avoid.
At this time, no one is offering any real alternatives to payday advances. To date, almost all of the attempts to create payday advance alternatives have either been charity-based, required government subsidies, unavailable to the general public, unprofitable, or unsustainable. Hopefully politicians will quit spouting rhetoric and stop ignoring the only people whose opinions should really matter – the customers who use the service and the employees whose jobs are on the line.
Regarding Tim Miller's recent Opinion piece on payday loans: Reasonable limits on interest rates and fees ought to apply to all forms of credit offered to the general public. Payday loans form a substantial segment of the financial services market, with tens of billions of dollars lent every year. Appropriate oversight is all the more important because many payday borrowers are not financially literate.
Lenders can make reasonable profits with interest rates capped, while liberating borrowers who, as Miller points out, first turn to payday lenders for assistance in a financial crisis. Payday loans at excessive rates inevitably ensnare borrowers in cycles of debt, as evidenced by the Center for Responsible Lending's recent report showing that 90 percent of payday lending business comes from borrowers who must take out five or more loans a year. Offering a drowning man a life preserver made of stone does not benefit him or society at large.
Ease into green routines
In response to Julie Sensat Waldren's May 2 Opinion piece, "It's not easy being green": While it can be confusing or downright discouraging to try to follow every green suggestion that comes across the transom, picking just a few individual actions that make sense can make a big difference.
Yes, it would be terrific if we could pass laws and regulations that would make substantial progress in a big, meaningful way. Ideally, communities should make it possible to do easily on a macro level what individuals struggle with on a micro level. But since that is not often the case – indeed, since communities and companies often wait to see what individuals do before they act – it's important for each citizen to do what she can without letting it drive her to distraction.
There is always more to do than one can do – more books to read, more places to visit, more people to meet. Do we read no books because we can't read them all? Of course not. It's the same with environmental action. We know we need to save energy, reduce waste, protect the air and water. Let's do what makes sense for our own lives, knowing that our "leaders" will follow our example ... eventually.
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