Webmaster Note: Michael Rowett functions as the Chairman of Arkansans Against Abusive Payday Lending (AAAPL) on the behalf of Southern Good Faith Fund, a joint venture partner of Southern Bancorp.
Shows payday advances often create more issues than they solve.
The recession drags on, and numerous consumers dealing with monetary emergencies are seeking fast money. For decades, payday lending вЂ” by which borrowers get little loans to tide them over before the next payday вЂ” was a popular choice.
Presently, there are about 22,000 storefront pay day loan shops nationwide, in line with the customer Federation of America in Washington, D.C. an average of, the industry makes $40 billion in loans and gathers $6 billion in finance costs from borrowers every year.
But taking right out a payday loan is not always a good economic move for the debtor.
вЂњA cash advance does not solve a financial crisis; it generates one,вЂќ claims Uriah King, senior policy associate in the Center for Responsible Lending in Durham, N.C. вЂњThe typical payday debtor concludes up in a debt trap since they need to return and acquire another cash advance to assist repay the very first one, then another, then another.вЂќ