A predatory loan is a predatory loan
One of the first things I learned in high school algebra is the reflexive property, a=a. So why are payday loans viewed so differently depending on who they apply to?
Anyone can obtain a payday loan by providing a post-dated check in exchange for a smaller amount of cash. The problem is that interest rates for a bounced check can be so high (often over 400% apr), that someone who misses payment for any number of innocent reasons gets stuck in a debt trap impossible to recover from.
Last year, the military asked Congress to cap interest rates for payday loans to soldiers at 36%. Congress responded in an effort to eliminate a major threat to our military readiness. But how can the same loan sometimes be predatory and unconscionable and other times be a healthy part of the economy?
Yesterday, the Montana Billings Gazette published an op-ed I wrote with Steve Doherty (a former minority leader of the Montana Senate) discussing exactly that. (Oh, but ps, I was actually a law clerk for the Judiciary Committee, not "staff.")
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