Wednesday, Jan 14, 2009

Payday loans serve the public need

Contrary to inaccurate portrayals of the industry, a ban on short-term payday lenders will hurt borrowers, especially those who are already struggling for access to credit in today's economy ["Hole in the shark net," Jan. 5].

A Dartmouth College study found that a 2007 ban on payday lending in Oregon hurt borrowers who were forced to turn to inferior substitutes like bounced checks.

A recent New York Times Magazine article also noted that payday loans are a valuable financial tool offering easy-to-understand conditions, with "no surprises, no hidden fees" (unlike many banks, which are offering these same kinds of loans without being demonized by media and political elite).

Borrowers are best served when they have more--not fewer--choices to pick from.

Source: fredericksburg.com/