Payday loan law loophole swallows borrowers whole

[NNN0LHI]

http://www.chicagotribune.com/business/chi-mon-payday-borrowers-may12,0,2759814.story

Kirk Donald was stuck in financial quicksand and sinking fast.

He hustled harder on his daytime sales job, worked night security at a nursing home and delivered papers at dawn. He emptied his family's insurance policies and retirement savings, borrowed from family and friends, and went short of food.

Why? To keep up with $2,000 in loans he had taken out without realizing that the 701 percent annual interest rate meant he would have to repay $5,848 in 4 1/2 months.

Consumer advocates are trying to protect borrowers like Donald, waging a tug-of-war with the loan industry in the Illinois legislature in an effort to close a loophole in the 2005 payday loan reform law.

[Blue_Roses]

1. we got sucked into one of these living

in Arkansas. What started out as a simple loan turned into a huge nightmare. It's ridiculous how these loan sharks stay in business.

[flashl]

3. A few weeks ago, Arkansas AG was one of the few who was working to clean up the problem

Arkansas AG: Payday lenders will shut down, stop high-interest loans

[msongs]

4. "loan sharks" depend on greedy people who do not read the paper work nt

[eShirl]

8. are you saying the borrowers are the greedy ones in this?

or did I misunderstand you

[flashl]

2. Banks and Credit Unions now want part of that action ...

Banks aim to lure clients from check cashers, payday lenders

WASHINGTON — After years of watching check-cashing stores and payday lenders steal potential customers, banks and credit unions are beginning to offer the same services and products, but in more affordable and responsible ways.

The movement comes as federal bank regulators focus their attention on the estimated 73 million Americans who are underserved by the nation's banking industry.

MCClatchy

[LeftHander]

5. Usury....Republicon's enabled the carpetbagging of America...

For nearly two decades the financial laws and regulations were stripped away to make predatory lending possible on many levels. That is why we are all suffering the economic and credit mess we are in now. The Banks came asking and the Republican couldn't bend us over fast enough....

Conservatism has been the single biggest disaster in this nation's history.

[MoeHayNow]

6. Like my dad says,

"Legal loan-sharkin'."
Always preying on those who can least afford it.

[Lochloosa]

7. He should have gone to a Loan Shark

It would have been cheaper.

[madmom]

9. Back in the way back, when I was first a newly wed, banks had what they called a

90 day loan. It was exactly that a short term loan, helped us a lot especially around xmas, wonder what ever happened to that? It seems that they would help in situations like this.

[Mountainman]

10. The idea that you can't pay your rent or debt so you borrow is really dumb.

I've done it too but the problem is that if you can't afford to pay your obligations, borrowing from these places is like drinking poison for an upset stomach. You have less money the next time you get paid and if you don't pay back the loan you get hit even harder.

We must come up with some other means to help out with the necessities of life. The poorer you are the more it costs you to live. I was in this mess so I'm not blaming anyone.

I had a used car that was a piece of crap and was paying the price of a new car for it. I was paying extremely high interest because of my past history. Prior I was homeless and unemployed and could not pay some debts.

When you don't have a checking account you pay some store part of you paycheck just to get your cash. You use a pay phone or phone card which costs plenty. It's hard getting back on your feet again but a lot of people do it.