Payday Lenders Can't Afford To Lend You Money At Only 36%

The Leftwing Conspiracy blog scanned a cute pamphlet that a payday lender is distributing to try to drum up sympathy now that there’s a rate cap on loans given out to military personnel. Boohoo!

From the brochure:

At 36% APR, the total fee charged on a $100, two-week advance would be $1.38. We cannot cover the cost of originating the a loan, let alone meet employee payroll and benefits and other fixed business expenses, at this rate.

It’s the hard-knock life, eh?

Don’t Cry For The Loan Sharks [Leftwing Conspiracy] (Thanks, Hank!)

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  1. Tzepish says:

    Incredible.

  2. farmerjoe says:

    Are military personnel credit ratings so poor that they have to borrow at, or above 36%? A possible upside is that it may open eyes to the myriad better lending options than payday loans.

  3. joeblevins says:

    It is true. The lenders will end up making VERY little on short term loans if restricted to 36%. These aren’t great risks to lend to at lower rates.

  4. Tux the Penguin says:

    What makes this so sad is that, somehow, other lenders are able to cover origination costs, payroll, etc, at 7-10%. And comply with all the banking regulations. Makes me wonder…

  5. castlecraver says:

    It’s just a shame only Military personnel get the mandatory APR cap, when they’re probably not the ones who need to be looked out for.

  6. youbastid says:

    @Tux the Penguin: Because those loans are much lower risk and in many cases secured in some way (items can be repossessed).

  7. harshmellow says:

    Jeez, what kind of rates are these places charging if they can’t “do business” with a 36% cut?

  8. AlteredBeast (blaming the OP one article at a time.) says:

    $1.38 on $100? Does that even cover the cost of all the paperwork?? In order for someone to make minimum wage processing these things, they would have to do 6 an hour (and that doesn’t count operating costs).

  9. ThomFabian says:

    Fun with numbers:
    The same interest rate can be reported as:
    1) 36% (holy crap, 36% is insane)
    or
    2) 1.38% (not too shabby)

    depending on whether you are talking about it as an annual percentage rate, or the amount of interestover the loaned amount for the period of the loan (1 to 2 weeks)

  10. D-Bo says:

    @castlecraver: Actually they are one of the largest segments of payday loan customers and thus do need to be protected.

  11. Charles Duffy says:

    @joeblevins: There’s obviously some business model by which one can offer short-term loans at a reasonable rate — credit cards do better at this than the payday loan industry, so talking about the cost of paperwork is a nonstarter.

    To be sure, a credit card provides an ongoing line of credit rather than a standalone loan — but I don’t see any reason why such an ongoing line isn’t an available option to the individuals targeted to this letter, given that they are, as a class, known to have an extremely stable employer.

  12. Rando says:

    Probably illegal to restrict access to them

  13. madanthony says:

    @harshmellow

    It’s not a 36% cut, it’s a 36% APR, which is calculated annually. When you break that down to a two-week loan, it works out to be far less.

    Are payday lenders expensive? Sure, but since people use them, I would assume that they don’t have an alternative – that their credit is too poor to use credit cards or bank loans, and that they really need the money if they are taking out the loan. And it beats borrowing from a guy who breaks your kneecaps if you don’t pay.

  14. pegr says:

    74 cents a week per $100…

  15. swalve says:

    @Tux the Penguin: Those are long term loans. Payday loans are very short term loans. 36% over the course of a year is a lot, but it’s practically nothing in terms of retail.

  16. bdgbill says:

    If you were going to go out on the street and let ANY random person who walks up to you borrow money, how much would YOU want to charge to cover your risk?

    These services are in the business of trusting people who have proved themselves untrustworthy.

    I personally wouldn’t do it for 36%.

  17. swalve says:

    @Charles Duffy: People who use payday loans are too irresponsible to have credit cards. They are not a good risk at the credit card APR. They are a good risk at payday loan APR.

  18. lowlight69 says:

    I guess my biggest issue is that so many people in the military have to use these to get by. “come on over here and put your life on the line for your country… no you won’t make enough for your family but we will pay for your funeral”

    all political issues aside (Iraq, Afghanistan, republican, democrat, etc) people in the military get payed very little, many of them in the lower ranks qualify for food assistance programs.

  19. stanfrombrooklyn says:

    It’s true that members of the military often make little money in terms of a paycheck. But there are benefits such as paid college education, lifetime healthcare, and pensions (if you stick it out for 20 years) that can add up mighty quick. Plus you get to shoot lots of guns and blow shit up. But knowing you get healthcare when you’re 60 doesn’t help much when you’re taking home $200 a week at age 25.

  20. kittenfoo says:

    there’s a couple in my town who own a payday advance place, but apparently, when asked what they do, they say they’re “in finance.” they were making a metric f**k-ton of money, too, maybe due to the nearby military installation.

  21. tk427 says:

    @castlecraver:

    …they’re probably not the ones who need to be looked out for.

    I have to disagree.

    Take a good look at the 2008 (MONTHLY) pay table. Keep in mind that half of the military is made up of enlisted personnel. (this would be the E-1 through E-9 portion of the table)

  22. Hawk07 says:

    I think another big reason that these lenders prey on the military is their job security. Civilians that utilize these types of lenders are making minimum wage or so. People that need to take out short term loans are likely to be less responsible with things like keeping jobs and paying off debts. So, these predatory lenders see the military as a cash cow with legal recourse to collect (ratting to Uncle Sam) versus private civilian companies who would tell them to f off.

  23. tk427 says:
  24. dreamcatcher2 says:

    It makes sense – there are fixed costs associated with originating and administering a loan, aside from the percentage-based opportunity cost of not investing the money elsewhere. Maybe the best thing to do would be allow payday lenders to charge a fixed fee (set by regulation) for a payday loan coupled with a sane APR.

  25. m4ximusprim3 says:

    @stanfrombrooklyn: You’re absolutely correct. They do get lots of benefits.

    Of course, your average investment banker doesn’t have to worry about 200lb IED’s which create 5 foot deep craters in front of their hummer.

    Just sayin…

  26. m4ximusprim3 says:

    @tk427: Just out of curiosity- do they pay the same taxes on those wages that us civillians do? IE, are those that are making 1200 a month losing 3-400 of that back to uncle sam?

  27. samurailynn says:

    I appreciate our military, but I don’t think they’re as poor as people make them out to be. Most military families that I have known who are claiming to be poor have the husband out in the military (most likely living in another country with a stipend for housing) and the wife is a stay at home mom with one or more children. Do you know what? If I quit my job, bought a house, and had a kid my husband would have a hard time supporting us too. The problem is that most families have to have two working parents in order to get by, but most military families expect that the woman should stay at home and not work.

  28. tk427 says:

    @m4ximusprim3: yes

  29. Tracy Ham and Eggs says:

    @samurailynn: I think we are also seeing (thanks to recruiting problems) more single mothers in the military then ever before. Raising 1-2 kids on a single persons income is impossible regardless of career.

    Im not going to get into it, but I think people (single or couples) who have kids at a young age before they have a stable income, then complain about benefits have no standing in my book.

  30. dgcaste says:

    @lowlight69: I’m in the military and get paid well. The problem is the snotty 17 and 18 year olds that blow their money every paycheck.

  31. GothamGal says:

    @samurailynn:

    Yes and No. I am a military wife and he gets paid crap, but he gets housing and living expenses paid extra because he is married (yes, I think it’s a joke). You also get more money for each kid (another joke). I work and actually make almost 3 times what he makes, instead of sitting on my ass doing nothing. OK, I sit on my ass all day, but at least I get paid for it.

    You are right that it would be hard to support any family on 1 income. We could survive on it, but I wouldn’t want to live that way. We would never have an luxury.

  32. youbastid says:

    @dgcaste: 17 year olds?

  33. ShortBus says:

    @youbastid: You can join the military at age 17 if you have a parent’s permission.

  34. EricaJoy says:

    @bdgbill: Generally this is true but in the case of military members, not so much. My entry level IT job paid me almost double what my ex-husband made after 4 years in the Army. The single really kids depend on payday loans.

  35. Tank says:

    @dreamcatcher2: That’s all well and good, but for disclosure purposes, application/origination fees are considered interest charges, and increase the APR in the REG Z box on a contract.

    I’m not saying it’s a bad idea, but it could be tough to police.

  36. Snarkysnake says:

    Improvise…Overcome…Adapt…

    Maybe the military is doing these people a favor. If they can’t get in the habit of taking out these unconscionably expensive loans,they will learn to budget,save their money and live their lives without being a slave to these payday lenders.If this avenue of short term credit is closed,they will have to presumably do something else.Hope that the “something else” is not worse than the original problem…

  37. dgcaste says:

    @youbastid: 17 year olds can enlist with their paren’t permission and a waiver.

  38. XianZomby says:

    @samurailynn: The military wife doesn’t work because her husband is PCSed every two years and so she can’t hold a job if she has to quit and go job hunting every 24 months.

    -ALSO-

    APR is annual percentage rate. You know, I’m sure I’ve written this here before. A 36% APR means 36% a YEAR. But payday loans don’t lend for a year. They lend for 14 days. So that’s 36% / 365.25 * 14. So on a loan of $100, for 14 days, you can charge about .09856% per day, or about 1.38% total for the two week period.

    So I loan you 100 dollars for two weeks at 36% APR? I am really lending you 100 and you pay me back $101.38. Great deal for you, huh?

    If you and I agreed that I’d lend you $100 dollars and you’d pay me back $120 at the end of the two week period, that’s a 521% APR. Seems outrageous. Except it’s 20% on a $100 dollar loan for 14 days. And that means a 521% APR.

  39. ohiomensch says:

    I was a military wife with two young children (4-6 at the time he enlisted) I always worked, and we always had to struggle with money. The military does not adjust (or at least it didn’t when we were in it) for the economy of the area where you are stationed. You might have rent or a housing allowance, but you still have to buy all the other stuff. And lenders would prey on military because they knew they would get the money no matter what.

  40. snoop-blog says:

    so there aren’t enough non-military customers out there to support the biz? if they are already paying somebody to sit there on the clock, i would think it sounds like discrimination to refuse only military and their families.

  41. XianZomby says:

    @GothamGal: Are you sure you get extra money PER KID? There is with dependent and without dependent status. And a wife is a dependant. And it affects your BAH. Your BAS remains the same regardless of your dependent status. And you get TRICARE for your kids and spouse. And as far as I know, you have to pay for child care on a military base out-of-pocket. No stipend for that either. Hey. You made the claim. Please let us all know if the military really rewards you with extra money for each kid you have, per extra kid. Because I don’t think they do. I think two married E-7s get the same amount of money each pay period despite how many kids they have.

    I also think that base military pay is very low. BAH is adjustable depending on the part of the country you live in. It’s meant to provide you with the same level of housing no matter where you go. So if your rank qualifies you for a two-bedroom flat, then you may get 400 a month in Alabama and 2000 a month in DC. Either way, adding BAH + BAH + base pay, depending on your part of the country = a living wage for your family.

  42. chrisgeleven says:

    NH just passed a law that capped all payday loans at 36%.

    [www.cmonitor.com]

    This is just one of the reasons why I love living in NH.

  43. TheUncleBob says:

    If the government thinks 36% APR is plenty for a PayDay loan, how about they pony up and offer PayDay loans for Military personnel.

  44. Snarkysnake says:

    @snoop-blog:

    Thay already are paying someone to watch out for their business. They’re called legislators. The industry handed out $2.7 million in 2006 at the state level to influence state lawmakers. They couldn’t buy off the pantagon because the military brass doesn’t run for re election. hence- the (totally reasonable) cap…

  45. dgcaste says:

    @TheUncleBob: if military personnel need payday loans, they are in financial trouble, which means they can go to the Navy-Marine Corps Relief Society (at least Navy and Marine Corps personnel- the Army and AF have similar campaigns) and get interest free (or very low interest, depending on the situation) loans. Sometimes the military personnel don’t even have to pay it back.

  46. dgcaste says:

    @TheUncleBob: So I suggest you inform yourself before throwing out random criticism.

  47. balthisar says:

    Ex-military here. Got out in ’96. Money was crap, which is I why I got out. That’s not to say that you couldn’t live with the amount of money you were paid, just that the job opportunities at the time were soooo much better.

    I never had to sell my plasma (lots do) or resort to pay day loans, or even go to the local bank where the draw was you got your paycheck a day earlier (still the same spacing between pay days, duh). I pawned a broken CD player once, and pretended I just needed a quick, temporary amount to cover me for a bit — suckers!

  48. Lerg says:

    I think you guys are missing a big point here.

    When the government inserts itself into business practices by regulating, aside from those that are traditionally criminal, it will causes businesses to stop serving a given customer base that for whatever reason felt this was a useful service/product at a fair price.

    Whether you agree or disagree with payday loans, or limits on APY’s, or whatnot, the fact was that the free market decided there was a market here. Which means individuals were free to choose to use a given service, or buy a product, and felt it was worth what they were paying. Now, the government has put an artificial restiction that is in conflict with what the free market found to be acceptable. As a result, the businesses STOP functioning. You may think this is good if you disagree with a given business practice, but I do not. Mainly because it limits the freedom of two adults to enter into a legal contract.

    Atlas Shrugged. It will happen more often if governments continue to overly regulate commerce. This hurts everyone in the long term. Same situation with anti-gouging laws in light of natural disasters. It disrupts the laws of supply and demand which causes quicker reactions and normalizations of supply flow if prices are allowed to move with demand and supply.

    Yes, I know, most folks here will disagree with me. I’m just hoping to present a rational counter-point to the prevailing viewpoint that most companies are bad and consumers need the government to protect them from their own decisions.

  49. Alvis says:

    How is a military salary not enough to get by on? For a single parent, maybe, but for the spouse not to work? That’s just selfish.

  50. usmcmoran says:

    I have been in the Marine Corps for 13 years and used to deal with predatory lenders regulary when they would call the command looking to collect. The reasons why servicemembers go there are many but are mostly related to living beyond their means.The organizations like Navy/Marine Corps relief will not pay for rims, car stereos and paint jobs.The lenders know that when that service member goes to them that he has job stability and that they can call his command and force him to pay them back or he will face charges. As far as military members not making much money in the first few years of their careers they don’t but you won’t find that in most entry level jobs either. As you move up in rank and time the pay increases accordingly.

  51. MrEvil says:

    My sister’s husband is on active duty in 1st air-cav. He’s an E6 and though he makes less in salary than I do. He and my sister live quite comfortably off his salary and housing allowance alone. My sister has NOT ONCE called me or my dad or my mom to bail her out of a financial jam. (though I’d help her without hesitation.) And they’ve never gotten a payday loan. They have three cars that are all paid for. A ’96 Mustang, ’01 Ranger, and a ’06 Chrysler 300.

    Only three sitations are happening with these folks, either they have more kids than they can afford (and if you ask me, the decision to procreate is not to be taken lightly); they are buying tons of crap they don’t need and can’t afford; or the missus is just really really bad at handling money.

    I can’t pretend to know all the intimate details a military family goes through, but my sister and her husband certainly aren’t facing any of the hardships these others are. Heck, my sister’s been able to afford trips to Europe and South Korea. Then again, they don’t teach personal finance in High School.

  52. vince77 says:

    I’ve been in for ten years now (<–that’s an Arabic Mountain Dew) and the pay issue isn’t as bad as it once was. But when you combine a young kid, first time away from home, probably a killer car payment with matching insurance payment, he is going to run out of beer money at some point. Add to that the ‘I want it now’ attitude and the market obliges.

    You get pay for housing if you’re living off base (based on prices in the area), a fixed food allowance if you aren’t eating in the mess/chow halls, and other allowances depending on station/duty (cost of living allowance, hazardous fire pay, flight pay…). No, it’s not a lot but it’s enough.

  53. t0fu says:

    [www.usatoday.com]

    Found this on it. These stores prey on the lower class and these people often end up in a WORSE position after getting sucked into these short-term loans.

  54. thedanza says:

    Other lenders can lend at 7-8% because they have physical collateral to secure the loan, and as a percentage of the total loan amount and life, origination costs are not as high as that of a loan that has a two-week life. 36% APR over two-weeks sounds bad when observed in annual terms without extrapolating fixed costs, but the fixed costs associated with originating the loan become less in APR terms as the loan’s life increases. Like they said, it’s $1.38 on a $100 loan.

  55. czarandy says:

    Laws like this are stupid. Restricting rates that lenders can charge will just make it harder for consumers to get loans. How can that possibly be a good thing?

  56. mantari says:

    czarandy: They’re called usury laws. They’re used to make lending practices illegal that were ordinarily considered simply unethical.

  57. ckaught78 says:

    What I think most people fail to realize is that these products are extremely high risk for the lender, which is part of the reason why the fees are as high as they are. Taking into account the cost of originating the loan, plus the risk associated with this product, at 36% apr they probably barely break even. It’s about maximizing profitability while balancing risk and reward. Reward being their profits.

    If you don’t like the fees associated with payday loans then stop living paycheck to paycheck and don’t use the service.

  58. ageshin says:

    I have been told that the mafia’s loan shark gives better rates than the payday folks. However all this just points out our insane notion that we gain something by using credit for augmenting our lifestyle. In the good old days there were usury laws and government regulation that came because of our expirience with the great depresion. Remember if one doesn’t know history one is doomed to repeating it.

  59. hegemonyhog says:

    @ckaught78: “If you don’t like the fees associated with payday loans then stop living paycheck to paycheck and don’t use the service.”

    Why didn’t anyone ever think of that?

  60. TheUncleBob says:

    @dgcaste: It’s great that the government is offering some kind of program to those in the Military – however, the fact that so many military personnel are having to resort to PayDay Loans shows that, obviously, these programs offered aren’t enough. I mean, why would anyone get a crazy PayDay Loan if they could get a low/no interest loan, or even free money? Let the government fix their own loan program before they start going after others.

  61. Myotheralt says:

    @farmerjoe: no, its that we have every thing needed provided, so our whole paycheck is petty cash. then when we need to pay something (like lats months loan) we dont have any money.

    /me 4 yrs Marines, now 1.5 yrs in the Army

  62. RvLeshrac says:

    @joeblevins:

    36% is a “lower rate”?

    That’s ridiculous.

  63. RvLeshrac says:

    @myotheralt:

    That makes absolutely no sense. What are you trying to say?

    @czarandy:

    It doesn’t make it more difficult for them to get loans – it ensures that they aren’t taken advantage of.

    Paying back these loans is typically impossible, since the people getting the loans can never afford to pay it back, as they needed the money to pay for something that their normal paycheck would not cover – then the next paycheck can’t be used for the loan, because that was why the first loan had to be taken out. No money.

    @Half of the other people:

    You are, frankly, an idiot if you think that no one ever has circumstances in life that cause them to need these things. A large number of military personnel, for example, take out these loans. They aren’t buying anything fancy – they’re trying to feed children on the paltry sum that the military pays them.

  64. dgcaste says:

    @TheUncleBob: people don’t resort to these loans because for the government to lend you money you basically have to prove that it’s not for a brand new HDTV or car stereo, which is what a lot of people use them for.

    @lerg: I sincerely agree with your point of view. the real free market is, by definition, set by the buyer and seller without coercion and misleading promises. however, the real free market leads to monopolies, unfair business practices, extortion, bottlenecking and price-gouging of essential goods such as baby formula and nintendo wiis, amongst other things. people will pay $100 for a can of baby formula if they have to, therefore, the market is established.

    I consider the free market to be unfeasible and great in a textbook. but the sinister nature of the cunning and cannibalizing businessman is to take advantage of people for his own good, regardless of the consequences. I’d rather a niche market such as payday loans fail and atlas get shrugged a little bit than people (stupid people, of course) default on their payments and ruin their future. there’s a market for drugs that the government has made fail. the real solution to the problem, of course, is making people economically smart, but we all know that’s never going to happen.

    I’d be happy to see our dream economical edifice thrive on what we think to be an essential facet of our capitalist government and way of life, but there’s too many douchebags around and we need uncle sam to stomp down on them.

  65. dgcaste says:

    @RvLeshrac: read the above posts where it explains how 36%, over the course of a year, in the scope of a payday loan ($700-$1500 usually), is really not that much.

    the risk of the lender is near zero when dealing with the military because all they have to do is call up the guy’s CO (commanding officer) and the wages will be immediately garnished. but to be setting up all those advertisements that say “PAYDAY LOANS!! E-1 AND ABOVE APPROVED!!” cost money and it’s no longer a competitive and feasible option to out-maneuver the other 100 payday lenders outside of Norfolk Naval Base in Virginia.

  66. Katharine says:

    @Alvis: A lot of places won’t hire spouses because they think they will pick up and leave because of the military. Also you can’t build seniority and end up working at crap jobs in the mall.

  67. whirlybird says:

    @Tux the Penguin: The only lenders who can afford to lend at that rate do credit checks, and refuse to offer those magical 7-10% loans to people with bad credit. Payday lenders will loan to anyone, period. The high interest rates merely offset the 20-40% write-offs caused by lending to un-credit-worthy scum that banks won’t touch.

  68. dgcaste says:

    There was never that huge of a market for payday loans. All the lender needed was a couple to survive. Now that the interest is capped they don’t have the volume and it’s really just a waste of time.

  69. brookeln says:

    In my experience with the military (have a boyfriend that was in), the problem is that these enlisted guys (18-early 20s) marry young and have lots of kids and a wife that doesn’t work. The vast majority of the wives on his base didn’t work. I don’t buy the excuses people put forth above. If you need the money, get a job. Two years is longer than a lot of professional people stay at their jobs, so that is no excuse (@Katharine & @XIANZOMBY). Or stop having more kids until you have more money.

    Keep in mind they also get great health insurance, housing is paid for, and they can shop cheap at the commissary/PX. Also, as someone said above, education is paid for, and you get a solid retirement. That’s a lot more than a low-income civilian gets.

    That being said, I still think these payday loan outfits are evil.

  70. TheUncleBob says:

    @RvLeshrac: “Paying back these loans is typically impossible,”

    Umm. Don’t borrow money you can’t pay back. That’s a pretty basic concept.

  71. dgcaste says:

    @TheUncleBob: These loans are easy to pay back with reasonable interest. Lenders take advantage of the young age of the customers and don’t disclose what the payments actually amount to be.

  72. TheUncleBob says:

    @dgcaste: “Doing your homework”.

  73. jdhuck says:

    I think the usual rate is $15 per $100 borrowed in a traditional payday loan. If annualaized that is 365% apr. My bank charges $39 if I bounce a check for $.01.

    Which one is the loan shark?

  74. JiminyChristmas says:

    I think those of you spouting ‘the wife should get a job’ line need to stop and think for a minute. Two things:

    First, at a lot of posts getting a job is easier said than done for military spouses. Some posts are in areas that have strong non-military economies. Others are in places like Minot, North Dakota or Pine Bluff, Arkansas where there’s not quite as much opportunity, to put it lightly.

    Second, even if you have just one child you need to earn a pretty decent wage to offset day care costs. If you work full-time and earn $10/hr and have a child in day care your net income is going to be around $2-$3/hour. Why pay someone else to raise your kids for the privilege of taking home $100/week? I don’t know about you, but the last time I worked for $3/hour was in about 1982.

  75. brookeln says:

    @JiminyChristmas: In your scenario, that’s an extra $400 a month that the wife could contribute, which could mean the difference between paying the bills or having to get a payday loan. If you can’t do that, then stop your crying, or stop having kids until you can afford your expenses.

    And your point about how some bases are in bumf*ck, thus there are no jobs: (1) not all bases are, and most aren’t so that doesn’t excuse the leeching wives, and (2) so what – if you have the drive, skills, and need, you can find a job. Most bases have programs to help spouses get jobs on- or off-base.

    The base that my boyfriend was at was in a major metro area and had plenty of jobs nearby. So why did the vast majority of the wives not work? Why did so many 20-year-old enlisted guys have 2 kids with one on the way, and wives that didn’t work? It’s just a part of the military culture.

  76. Tonguetied says:

    Payday loans lead to a vicious cycle where the money that you would have used to tide you through to the next paycheck instead has to be used to pay off the loan you took out last paycheck thus making it necessary for you to take out yet another loan.

    However I can tell you that most military folks can get by without them. There are a certain percentage though that get caught up in them.

    BTW as a Navy Vet I can tell you that the scuttlebutt about Navy Relief was always that it was a worthless organization. I don’t have any personal experience with it but have heard that it put high barriers to loans and such for things like car breakdowns and such. Now how they dealt with bigger crisis I couldn’t say but for the ‘everyday’ emergency don’t even bother with Navy Relief was what I always heard.

  77. RandomHookup says:

    @m4ximusprim3:

    But some don’t have to pay state taxes depending on their state of residence. And pay when you are in a combat zone is tax free!! Where’re my combat boots? I’m ready to go back in.

    Honestly, these places loved privates because (1) they were generally 18 or older, (2) pretty stupid with their money — especially back in the day when they could legally drink, (3) would fill out an auto withdrawal form so they could get paid without hassle and (4) they could complain to the chain of command if Private Snuffy didn’t make payments. Good flippin’ ridance.

  78. inkhead says:

    You know what? Good for the military. Hell they were even NICE to these shady lending places. They are just forcing them to submit to LAWS (which these places always get around forever…). Jesus Christ if you can’t make money at 35% or can’t accept your profit being this low then die….

    I’m against check cashing places, but sometimes I know people depend on them… Because it allows them to always float one paycheck worth .. Very sad when things are that tight.

  79. Charles Duffy says:

    @swalve: Military folks are excellent risks — their employer is extremely stable, and it’s easy to garnish their wages — so the “they couldn’t get another loan” argument just doesn’t fly.

  80. duffbeer703 says:

    @Alvis:

    The military pays monthly, which can be tough for people to manage. If you’re an enlisted man making $25,000-35,000/yr, it’s tough to get by on $1,800/mo pretax, especially for a family on one income.

    And about the tax thing — state taxes are based on where you enter the service from. So if you’re from high-tax California or NY, you get to pay.

  81. This will really discourage the payday loan market and finally I am afraid can even lead to its removal. These are short term loans and really needs some thinking before putting a ban or before putting a restriction on the interest rate.