This Trap Is A Dangerous One

I know as I fell into it once myself at a time in my life when my credit had hit the skids and I had limited places to turn to borrow money in times of dire need. We all know the situation, those who need it cannot get it, and those who don't can't get enough.

These pay day loan stores are nothing more than legalized loan sharking and should be shut down immediately, or at the very least brought into realistic lending practices with rates that are more in line with prevailing apr's offered to anybody with bad credit histories or simply not offered at all.

The thought that a person with no ability to borrow has the means to pay higher than normal interest rates is simply a joke that has been played on the poor and desperate for eternity and should stop now. Particularly since many of these people can no longer file bankruptcy as easy as the rich used to be able to do for years and years and the poor as well. These rules have been tightened so the payday loan scam should be ended.

Payday loans growing problem:

Beacon Journal | 05/19/2007 "Phil Betourne works full time at a grocery store in Canton and makes enough money to, in his words, "get by.''

But Betourne is not getting by. He's falling behind."

His unpaid public utility bills are piling up and he is facing foreclosure on his home.

Each month, Betourne signs his paycheck over to payday lenders, but the money he makes doesn't cover the interest owed on short-term, high-interest loans.

When his wife was involved in an automobile accident, and banks would not lend him money, Betourne took out his first loan with a payday lender.

One loan led to two, and two to four and now Betourne has 10 going simultaneously.

``I feel so stupid, but what was I supposed to do? Go out and rob a bank? I did what I thought was necessary,'' he said.

Betourne is caught in a vicious cycle of borrowing, repaying and then borrowing again.

His story is emblematic of a growing problem in Ohio as the number of families with these short-term loans now exceeds 400,000, feeding an industry that has grown from 107 store fronts in 1996 to 1,586 a decade later with profits exceeding $290 million, according to Policy Matters Ohio, a Cleveland-based progressive research organization. read more

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