I think we can all agree that these are not particularly attractive terms. Of course, the purveyors of these products do not pitch them this way but once you add in the interest and the fees, the full cost of many payday loans becomes outrageous. It makes plenty of people downright angry and others scream that there ought to be a law…Well, some right-thinking lawmakers are trying to get their head around the issue of how to regulate these short-term loans and stop the abusive practices that have allowed the payday loan industry to mushroom on the backs of consumers with few resources and little recourse. As I have previous noted, there are some good ideas out there, including a law which now bans them for military families and a proposal from Senator Durbin. Unfortunately, there are also some bad ideas out there. The New York Times sniffs one out in this editorial, which calls out a recent proposal from Luis Gutierrez, chairman of the House Subcommittee on Financial Institutions and Consumer Credit, which would allow payday operators to charge what amounts to an annual percentage rate of 391 percent.The Times rightfully calls this a regressive bill and quotes Rep. Maxine Waters, a Democrat from California, saying, “We’ve got to resist any attempt to make it look as if we are cracking down, when in fact we are opening the door to more abuse.” I hate when that happens and we have to make sure that it doesn’t happen agian here.
