I'm working on a Kos blog entry on this but I wanted to post this story here to get feed back. The banking industry and in particular loan sharks or payday loan businesses are sapping the buying power of the middle and Lower class.
I can speak to this on a personal level and I'm wondering if anyone else has had an experience with this.
You hear about the subprime mess but thats only because it's a high profile story. These are stories of people, falling prey to agencies, that before could get assistance through the government. With faith based programs running out of money on a regular basis, people who need to keep their utilities on or buy medication must turn to these lenders for help. I know because I too have a personal story to tell.

This is a very compelling video and story...

http://link.brightcove.com/services/link/b...bctid1414240535



http://online.wsj.com/article/SB1202776309...ays_us_page_one

The banking deregulation of the 80s did us in...



http://comm-org.wisc.edu/papers2002/hertz/hertz.htm#4

Here's my Kos diary entry

http://www.dailykos.com/story/2008/2/17/17...963/1023/458679

This is incredible, Acebass. I knew this was going on ~ but not the details of how it's being accomplished. Hard to believe that these unethical lenders can get the Social Security deposits transferred to their own business bank accounts by "helping" the borrowers fill out the paperwork.

And what does Bush's government do? Sounds like the lobbyists for the pay-day lending industry have it all sewn up. No regulation since there's so much money being made...this is really an extremely disturbing situation. And it has all developed under this administration and the Republican Congress (previously).

John Edwards did talk about it. I haven't heard the others even mention this horrorific reality for so many people struggling to survive.

And how much of the so called stimulus package will go to these lenders. People will use the money to get out from under them but will it be enough to help them from having to go back.

Here's the scenario. You have a job and a checking account you go in with a bank statement and utility bill to prove your address. You fill out a one sided form then you write them a check for the total amount. If your loan is say 425.00 you write them a check for 500.00. In two weeks, by the agreement you either come in and redeem the check or they deposit it, at least thats the original premise. Of course the average citizen can't just let the checks go through because they have future paychecks ear marked for other bill. So they let you extend it, you take in the full amount in cash, $500.00, then you write out another check for the full amount and in return they give you the $425.00 back. The cycle continues.

Now you do the math. You have paid them $75.00 every two weeks, because you can't afford to let the checks go through. If this goes on for say 6 months at $75.00 a pop, twice a month, you've paid them approximately $900.00 and you still owe the principle of $500.00 on the original loan. Are we in the wrong business or what?

Deregulation seemed like a good idea at the time for so many things...but unfortunately, it seems to be a nightmare for those caught up in its web. Thanks for this discussion, Acebass. It's good to see the real-life scenarios.

Like anything else there are those who would distort an advantage to their own ends. This is why we need a strong central government to protect and to regulate. This just proves that without regulation these people can't be trusted.
There's a reason that greed is considered one of the 7 deadly sins.

As a foot note, greed has become so popular we have a TV show dedicated to it. Now is that subliminal advertising or what?.

This is different from a pawn shop how?

Yeah, if you borrow from a pawn shop, your worst liability is they sell the item you pawned.

With a payday lender, they can put in a check, knowing when you get paid ... which hits, and if it clears and you needed that money, you get to go back to them.

Its like modern day sharecropping.

Bruce! So good to see you here! Thank you for joining us. I know your excellent diaries from Daily Kos and your efforts on behalf of JRE as well!

Welcome, BruceMcF! I'm looking forward to your "Topics" and "Comments."

And I hadn't thought about pay day lending as being akin to modern day sharecropping...but of course, sadly, I think you are absolutely right about that.

Or the old company store that you get so indebted to they own you lock stock and barrel. This is an industry designed to prey on those who need help the most

It did? I had thought from the outset it was a cover story for corporations taking the protections away from both people who needed them and from people who didn't need them ...

... like the old saying, the vagrancy laws are fair, they keep both rich and poor from sleeping on the park benches.

This is an interesting article.

Thou Shalt Not Steal?

I was working with a utilities holding company in the mid-90s and all the talk was deregulation ~ how it would be great for everyone since the competition would lower the prices. What??? At the time, I remember thinking, "what's all the excitement about"? It wasn't as if the utility bills were that high. Certainly not like now. But those were more innocent times. Everyone I knew was doing ok. But deregulation was the beginning...

You saw it, Bruce. I only sensed something wasn't quite right. I like your old saying.
I think the one often attributed to P.T. Barnum fits too..."There's a sucker born every minute..."

Oh, and please go ahead and plug/pimp your Midnight Oil diary on Kos whenever it goes up. We like that.

The sad part about this article is it's right. People who patronize these places will defend them just because they are their only hope in a pinch. Without these predatory lenders these people are out in the cold.

Their hope would be legislation. North Carolina, you will notice, is one of the few states with strict 'predatory lending laws.' At one time these places were prevalent here, practically on every corner. This is what JRE wanted to do and sited N.C. law in his speeches. Breaks my heart, because JRE was the man with a real plan... a candidate who could have really helped this country.