@@austinhernandez2716 Sadly most people don't even make enough money to save anything. It's gotten worse as of 2024 with the rising cost of living with stagnant wages, and people are fed up.
Usually, it's the choice between taking a (often predatory) payday loan, or some other, unknown option or outcome. The fact that so many people choose the loan should speak volumes about the other option.
The other option is probably a uncomfortable one, living within there means. Can’t go to the casino, buy new clothes you don’t need, can’t go eat out every day etc. Instead have to stay home after work and pay off other debts to get ahead. Yeah that doesn’t sound as easy or as fun as taking out a loan.
@@captaindestruction9332 you just said a lot of bs people are using them to pay rent, you can’t save if you don’t make enough. You people let the government take your rights away and destroyed the fucking economy but still say “oh just work harder” maybe change the bank laws to where people can get access to funds while still being responsible to pay them.
But it is their body so it is their choice. If you want to put heroin in your body you should be free to do that as it is your body. By the way sugar isn't good for you so do you think we should stop people from consuming it? Transportation/driving is dangerous so should we outlaw driving?
You are partially correct. You do have the right to shoot dope into your arm since you own your body. That's an awfully fine line to walk though. If you want to shoot dope and climb behind the wheel of a car and risk someone elses life because of addiction, you are going to be doing some time in prison, if you survive at all that is.
@@thetasworld you roll with the punches or work with whatever you owe to get them paid. You don’t go in to debt because of other bad decisions. Thats making a bad decision to try and fix a bad decision. Its stupid.
Fantastic way to just easily dismiss tens of millions of working class people. Nice job. 👍 No wonder socialist views are growing - especially amongst the younger generations that make proportionally less compared to older generations when they were young.
so... it's stimulating shadow economy and draining public revenue. but why then the authorities do so little about it? my uninformed guess is that republicans are too anti-regulation, while democrats fear to derail the illegal-immigrants economy
and depriving them of the necessity of social services that will keep them alive once they are feeble and tapped of their labor and undermined construction standards, labor standards, public infrastructure and public education. They made themselves bondsmen.
LambChowder1 No. Save your money. Invest it wisely. The government doesn't need to do it for you. If you're not intelligent enough to handle your own money, you deserve to starve in the street.
dondoes - Thank you, sir. I am so sick of people telling me that someone else will starve in the street. Go give to charity if you're concerned about that, but adults are not children. They can plan ahead.
I agree with PDLs being legal, but I strongly disagree with the title. PDL's are a terrible vice for pretty desperate people, but adults should make their own damn decisions. Booze, cigarettes, energy drinks, lottery tickets, drugs (when not medicinal use)...all vices, but best moderated by individuals.
+Doug Confere Which is fair enough, though it's pretty rare. The most common expense that can hurt someone who was even responsible is a medical emergency, but payday loans won't come close to covering that. In most practical cases, PDLs illustrate the paradox of safety nets. They tend to encourage sloth, which creates a faux need for more safety nets.
They created more dept on small communitys with unstable job markets... loaned sharks is what they are. in 2008 this small town loan place gave a loan out for 360.00 on title loan ten years later after they sell this dept pushing the statue of limitations of seven years to ten they get there judgement of wage garnishment of 17000.00.ill never go to a loan place again they could have taken the car and profited but never came cuz they certainly got a better price.
The poor are always the best targets for these payday loan agency's. It never ceases to amaze me how these companies are always in poor minority communities !!!
They aren’t, but I imagine that the types of businesses are the only ones interested in serving poor customers. Gotta have good credit for a “real” loan.
Funny thing is, I want to complain about this because that is the ideal. However.. I used a payday loan back in the 90's putting my car up as equity. It was an immediate emergency and I paid if off within a month. Fast forward two years and I used check cashing services for 5 years straight when I worked alongside visa migrant workers in a construction company. It cost me $2-6/month to use the service versus $16 a month to just to have a basic checking account. I established Wells Fargo (you know where this is going) shortly after so I could set up a paypal account for ebay. WF liked to hold transactions over and not apply them for weeks at a time....then during a short window when my account may have been just short of funds for whatever reason, they would apply the transaction and gouge NSF fees. Using check services work for people who are in my income bracket (I'm mildly disabled) and in the long run (as long as you're not a drug user or frivolous spender) you actually get screwed over less.
Payday lending is a predatory practice that almost always leaves its participants worse off than they began. It's a "free market" alternative to poverty prevention programs that might actually help people to turn around their finances rather than entrap them in a cycle of debt.
Years ago, when I was going through a mental health crisis, I had a short-term money crisis. I used a payday lender to get me over a rent emergency. Because I was self employed as a taxi driver, by working a couple of extra hours each day, I was able to make an extra $800.00 or so for a month to pay back the loan, and not need to revolve it. But I had to have that loan. If I lost my apartment, I'd still have a job, but I would have had to move into a daily or weekly pay motel room. My very nice studio apartment was $450 at the time, and the cheapest, shittiest daily or weekly pay equaled at least $1100.00 per month. I saw plenty of cabbies with poor money management skills end up going that route, and with many of them never be able to work hard enough for a long enough period of time to put together the nut necessary to move into an apartment. The loan? $500.00. The payback? $575.00. That $75.00 in gross fees saved me at least $600.00 extra per month into the far foreseeable future. Who go the better end of the deal? If you say "The payday lender, of course," you'd be wrong. That company made $75.00 off me, and I saved at least several thousands. I live in Arizona, where payday loans are no longer legal, with interest rates capped at 36%. However, the change in law doesn’t mean that all short-term lenders had to close. Some businesses continued operations by offering other products and services that are permitted by state law, such as installment loans. Lenders can no longer advertise the availability of short-term loans, with the exception of tribal lenders. But this change in the law has cut many people out of the market. A person who is worth a risk/reward interest rate of 150% might not qualify for a 36% loan. So what is this person's option? A car title loan, which is just a fancy way of saying, "We'll lend you $1500.00, you pay us $200.00 a month for 10 months, and in the 11th month you make a final payment of $1500.00. You'll do that deal, right?" But people jumped at the chance to risk losing their vehicle in this manner. Once, after a hospital stay of almost two weeks, I went to a title loan company for a $300.00 loan, with the total of payments over ten months of $500.00. (To avoid a balloon payment. I shopped around for a company that did not allow balloon payment loans, so that I wouldn't be tempted to fall into the minimum payment trap.) I was amazed when I found out that they had only one cashier taking payments, SIX combined "appraisal and loan officers," and a manager that floated between the two positions if and as needed. Appraisals took about five minutes. To pass, a vehicle only needed serviceable tires, all accessories to be functional, all lights working, and an easy start and idle. And the loans are nowhere near the max equity in the car. In 2008, my $300.00 loan was the maximum available on my paid-off 1996 Crown Victoria Police Interceptor with a wholesale value of $1500.00 per the blue book pricing guide. Since the loans were 5X collateralized (available equity being 5 times the max loan offered on a vehicle), everyone, and I mean everyone, who wanted a loan got one. No visible means of support or ability to pay? Meh. Are these businesses abusive and predatory? Almost never from the point of view of the customer. And the whole idea that the poor are generally stupid or incompetent with their money has to go away. What little resources that a poor person has are generally handled better by them, than the much larger incomes of the average middle class person. Sure, a lot of poor people have no savings. Just like a very large percentage of the middle class. Show me a poor woman with a $150.00 hair weave, and I'll show you five middle class earners with a $150.00 Starbuck's monkey on their back.
“Help the poor”? Don’t make me laugh; we borrow money and then the interest steals our next few years worth of pay checks and we’re further in debt than ever before.
High interest loan sharks do not help the poor. Helping the poor would be teaching them how to manage their money better...or how to fight for a better wage.
You are making a false dichotomy here. There are numerous ways to help people. Giving them a badly needed short term loan when no one else will is helping them in many cases.
@@mikemayo4812 yeah and that's the problem. That's exactly the reason why the us housing market crashed in 2008. They gave everyone with a pulse a home mortgage with variable interest rate, and as soon as those got up it blew up.
This is the first time I've totally disagreed with a video on here. These places are loan sharks they trap the poorest people in endless cycles of debt. This was even acknowledged in the video. I've seen people lose their cars because they were desperate and took a title loan. They paid back the principal but the interest was just so high they couldn't keep up with it so their car was repoed. Imagine what that does to someone that's already barely hanging on.
I want to get rich and stand outside of one of these just handing out money enough to pay off pepoles debt and cover what they need and try to make pay day lenders go bankrupt
What this lady ignores is that when she talks about people paying to take money off cards, it is often for drugs, if u dont do drugs how many daily purchases can you think of that you cannot use a debit/credit card for? Few if any
You can argue that there is an underlying problem but if I made that argument for pain management say "give me heroin" no matter how right I am about pain, I will not be better off with heroin. Besides, the underlying problem is poverty. You can't loan your way out of poverty. "Don't judge the people that take the loans." Oh really? So if a snake oil salesman says that, would it be believable? I don't think so. It's the industry being judged not the people they prey on. You wouldn't normally pay $10 for a bottle of water but if that or dying of thirst you would. They are not bad/stupid people, just desperate. Poverty does that.
+TheAtheistPaladin Well the solution is not you judging, which is cheap. You should be there selling the bottle of water at less than $10. Do you ever wonder why no one is doing that?
because personality types that are correlated to go into business are less compassionate [openness] and more conscientious and choleric. and, i say this only from business people and types i've met so this part is less data more relative, they tend to be borderline sociopathic as well, ie two faced, back stabbing, double dealing and double crossing
lol easy troll is easy. i'm a libertarian you gobshite. maybe try harder or step out of the cage of your ideology. collectivist HAHA oh my god that was priceless.
dark light Unfortunately banks, retail banks, that is, have a monopoly. There is no reason except greed that keeps them from giving you your money when you want it. I can understand having to verify a check before cashing it, but five days is ridiculous. I use online banking almost exclusively and haven't seen the inside of a bank in at least a year. If I have a bill due on a Saturday, Sunday, or holiday, I have to pay it on the previous day. Even though I pay it using their app or site with my computer or phone. It's just a computer sending payment to another computer, why does it care about weekends or holidays? No one has to manually deposit a check and no human touches the payment in any way. It's a huge revenue booster for the payee, they get their payment early and I lose the interest for that time. Scam!
I was also surprised by the comment that there are apps that allow you to access and transfer your own money instantly whenever you want for free. Why can't you normally do this in the US if you have a savings account?
Ehh. I feel like lumping together Check Cashing services with Payday Loans is like trying to lump together Marijuana and Fentanyl. Like... they just aren't the same in the potential harm they cause.
The piece is incredibly tone deaf. Yes, these lenders serve an underserved population. The problem is these lenders are basically skimming off the top from the underground economy. Romantacizing employers who duck payroll taxes, Social security, workman's comp, and disability obligations aren't heroes. Of course there's not a single mention of individuals who work under the table to duck alimony, child support, or court judgments, or a further examination of how this subculture of undocumented/non-traditional workers artificially suppress wages and create an unlevel playing field in low income communities that suffer desperately for not being a part of the mainstream economy.
No way to spin this in a positive light. This is taking advantage of the poor and I have studied business, finance included. Let's call a spade a spade.
HisReverence I guess the point of the video was that the payday loans are filling a need, but I think in a bad way. Where else would people get money on a short term? We need an alternative or a place that charges lower interest rates.
Banking is a service and it costs money. So unless someone is willing to provide it for free to low income people, these businesses will continue to exist.
This is mafia like lending ! Unbelievable. I know people who have used these places. They have no idea how bad they are getting ripped off. On the other side of the coin, people must learn to live within their means, learn to budget their money and avoid ALL debt. Credit card, payday loan and the like.
This is bullshit. I was hit with hard times and hit with 300% interest on a payday loan that completely burned me. It makes a bad situation worse in the long term. You're literally telling the best case scenarios and ignoring the big pictures.
Great Video. I am using it in my High School Financial Literacy class! I prefer to show multiple sides to a story so my students can make decisions based on facts, not one side of story.
I was always bothered by the term “predatory lender” because it presumes that poor people are stupid or naive. They “target” poor people. Well, every business I know has a target market of people who want their products or services. McDonald’s targets hungry people with little concern for their health. Are they a predatory restaurant?
This video may have just destroyed the last shred of respect I have for "Reason." While payday loans might be necessary for some people they need to be regulated to protect the uneducated and minimize their ability to financially cripple those who use them.
This is proof that we should transform the post office into banks too. So people can deposit/withdraw money without any fees and the post office is everywhere
Oh Whatup says: "That sounds ridiculous" == When the social classes become rigid, poor stay poor and rich stay rich because poor have more burden than rich, the society fails to become prosperous. "History of the Republic of Venice" en.wikipedia.org/wiki/History_of_the_Republic_of_Venice "La Commenda" blog.supplysideliberal.com/post/46499129502/the-rise-and-fall-of-venice Th city became awful rich because the poor found the way to get ahead.
And this is good for the poor because? And this is better than micro lending because? If you got rid of every payday lender yo would have gangs loansharking to how working poor and lower middle class. If you had honest micro lender, you would have neither mob lending or payday lenders. Jeez we can do this in Bangladesh but not Detroit? Of course if we have honest bankers we'd need none of he above.
No Mrs K -- I think we should screw people whenever we can and call it good business. I especially think we should do to tho those who can least afford it. If someone has a chance, take it from them. If crawling, kick them in the head. Hell if they get poor enough you can march in there, all righteous, singing Christian songs and take their kids and send them to perv foster prisons. Hell in Arkansas we can put them in debtors prisons (I think it's Arkansas) . Nobody is that stupid to equivocate the way you do. wait, I guess there are two of you.
This hurts poor people. I've lived all over the world, and seen all kinds of lending practices. We did a study on the poor and lending. It was an experiment on a new cloud-based data analytics platform we built. Sure it was cool, the computer was novel, the cloud architecture, the power, the young freshly minted PhDs. And I mean under 26. Here's the funniest part - the young folks (and these are Cal Poly, Harvard, MIT, RTI, and other lesser hailed schools) notion of poverty. They opined that microlending had little effect as it did not lift people out of poverty. You know now a little about my attitudes. I asked them how they defined poverty. In one case, in equatorial Africa, a man borrowed money to put a new roof on his home. They said see, that did help. Need I continue.
I did a payday loan one time. At Grace period too the people there tell you how long it will take to pay it off and there was a limit based on your income at the time of borrowing.
I used a afs once because they gave me a loan when I was only working for 1 month, the bank wanted 3 months of employment. After 3 moths I got a low interest loan to pay the afs loan.
If there are helping the poor, why don't they openly advertise their effective interest rate? In Ontario, Canada, I have calculated and confirmed the rate to be 3,724%.
Banks have left low income neighborhoods. Bank won't cash checks of low income people. She made no mention of the high interest rates. Did you know that Bank of America operates Check Cashing Outlet?
Unbelievable how different the US really is in comparison to other parts of the world. I haven't seen a check in years. I don't even use cash anymore, only debit cards.
It’s because these people owe a bank money from a previous account they screwed up by letting it get a negative balance and not paying it back. Now no bank will touch you until you repay what you owe.
@@dogguy8603 LOL no, having cash is not as safe as you think. at any moment the government of any country might change the legal tender, lets say that the Turkish decide to stop using the current Turkish Liras and instead from next week the only legal tender accepted will be the New Lira and the exchange rate from the old lira to the new lira devalues everyday until it will be worth nothing by next month, then what? This exact same situation happened in Venezuela 3 times over the last 20 years, they have relaunched the Bolivar 3 different times and deemed the old Bolivares worthless, Brazil did the same in the 1990s when they replaced the Cruzeiro with the Real... the list of tricks and flips using cash is long and bad. The only protection against government overreach in regards to currency is decentralized currencies not managed by governments... like Crypto, or silver based currencies (gold is too rare).
@@pedrolopes3542 lol you act like crypto is free of government influence or tracking, btc is more tracable than cash lol. If the USD went the way of the bolivar, then we will have way worse problems than deciding which currency to use. You cant eat silver, you cant eat crypto
We I never gave the Check Cashers much thought, since I do direct deposit, heck I hardly ever write a check anymore. Just two this year so far, 30 years ago it was all I did, write checks balanced the checkbook once a month when I got my statement in the mail. Now I just do it online, I use a Debit card, I pay all my bills on line- I balance my checkbook every day. Mostly to catch anything strange or if my accounts have been hacked. I used a PDL once, I can understand the need for such things. I don't use them. But they are there should the need arise.
So take the example of the guy who needs to fix his car now or he'll lose his job. Ban payday lenders, now that guy is unemployed. You're "helping", statists!
Technoguy3 he gets the loan and saves his job, fast forward two months, he owes his check to the lender just to cover the interest, loses house and job. But it's his to loose and if he wants let someone use him in that way, it's his business.
They should honestly be illegal. I like a majority of ideas from reason but this is not one. Just open a bank account and a few credit card accounts and budget and find ways to make money. Not that hard. Just got rid of taxes and we wouldn’t need payday loans
What a bunch of hoohaw. She's only addressing the demand for it, not how borrowers are going to pay it back when the interest is so high and they're already poor...
Every example in this video is just showing that people don’t know how to manage your money. If you need to use this services to pay your employees, your doing something completely wrong. If your use this service to bank roll your next job site. You need to learn how to manage your money. It amazes me how many people don’t know how to manage your personal momey. No wonder this country is so far in debt personally and with the government.
0:00-0:03 They are better known as payday lenders because "alternative financing" is euthanistic af. 0:03-0:20 They are popular because many ppl are financially illiterate by not comprehending that the high interests would worsen their financial situation in the long long compared to any predicament that inspired them to use such credit. Hence, the satire against these loans. 0:21-1:10 Ppl do not need loans that would give high interests that would worsen their conditions in the long-run. PPl do not need credit for consumption because that spending does not even net increase growth. Consumer credit, even credit cards, are bad for consumers and ppl would survive better (in the long run than without). 1:11-1:34 Has she considered financial illiteracy as the primary reason ppl use these services and not knowing better alternatives such as budgeting contacting billers and negotiate plans. 1:35-1:50 Credit Cards grew over the years yet ppl put themselves into unnecessary consumption debt. An increase in demand does not mean the service is good. 1:51-2:45 Middle income can be financially illiterate too, hence credit card debt, title loans, time-shares, and buying/refinancing houses. Poor ppl do not comprehend the long term consequences of bad financial decisions. Payday loans advertise as "quick cash" because financially illiterate are enticed by the convivence, regardless of consequences, and cars first promote "monthly payments". 2:45-2:54 She is using anecdotes to support her position, which is bad since she did not verify if her expeicnece can be a functional sample. 2:55-3:55 They are only providing a service that charges high interests, which worsens their clients' financial predicaments in the long run. 3:55-5:04 These clients are not taking into account how bad the interests are on these loans, they are only thinking about the "quick cash". Banks are better in the long run due to not using high interest rates (even taking fees to start an account). If people understand how bad these loans are, they prefer literally any other option. Financially illiteracy is the reason ppl fall for them. Service cannot be quantified and choosing finances based the niceness of clerks is stupid af. 5:05-7:13 Anecdotes aside, it financial ergriosus for Carlos to use payday loans instead of a bank account, which provides sufficient credit than a payday loan. Also, the guy should not undocumented people since it cheats society. The guy could have used money to save, re-invest in his business than interests higher than those provided by a bank. 7:14-8:48 According to Pew, 79% of ppl's payday loan is for regulatory expenses, i.e. an electricity bill. On the last part, yes, this why the interest is bad since ppl would more behind expenses and resort to more credit. 8:49-9:35 The same Pew Study said that if paydays loans were not an option, ppl would resort to a combination of tactics, such as cutting expenses, barrow from friends/family, sell possessions. Also, there are other solutions. Maybe use the post office as a public credit union. Or even better, nationalize, collectivize, and de-commodify the economy that would not operate for profit and would reduce/eliminate the issues that ppl have for regulatory expenses. 9:36-11:05 This sounds good, but this is referring to online money transfer services, not quite the same but in a similar ball-park as payday. This has nothing to do with lending. 11:06-12:05 There are tons of financially illiterate ppl who use banking, but use credit on consumption, i.e. credit cards. However, ppl who resort to other sources of credit are doing for financially illiterate reasons, as explained earlier. 12:06 to end Her financial services are not lenders. As far as I can tell, she is not using her account to use credit on consumption, so I hope she instills this value onto her kids. This comment has gone for too long now. Good day. Please reply.
I agree with the notion that it's good for people. It's a last option. I have a bill that needs paid and they will give you money in exchange that you pay it back asap. If they did not put extreme interest rates on those small loans, people will just not pay it. It forces them to make sure they pay back that loan.
glanemann and they do everything they can to get u to just extend the loan, the are parisitic scumbags. but it's no one's business what they are and it's well known how shitty they are so people should no better. If our central banking system wasn't a monopolistic parisitic rash on our ass, this wouldn't be a problem either. but it's not our job to shut down a business people want to use.
What happens when they don’t or can’t? They are more fucked than if they simply where late on a bill. Its awful because it fucks over desperate people.
Isn't it very similar to how people get caught in credit card debt? People walk around with thousands of dollars of credit card debt at 20-30+ percent interest, but that's okay? Providing the same basic tool to someone who either cannot or does not want a credit card seems a bit misplaced. Life isn't perfect, not everyone has a rainy day fund, you got to do what you got to do.
I see this comment is old, but I still feel need to reply.. No one is saying credit card debt is ok. However, those percentages are misleading due to a difference of time frames. Credit cards come with an ANNNUAL percentage rating between 15 and 35 percent which is awful. Payday loans tend to come with fees of $15 for every $100 borrowed, so 15%? But remember that loan needs to be paid off within two weeks. If you adjuast the time frame to make it an annual percentage rating, that comes out to 391%.. more than 10 times worse than credit card debt. The idea of a payday loan isn't wrong, but the practice is ALWAYS predatory. You cannot make money off of the poor without taking everything
One of my old friends used one of these check cashing places and had to declare bankruptcy at the age of 24. He borrowed $500 and paid $1500 for that one loan. His life is RUINED for the foreseeable future. And he's so young. I felt so bad for him. If I knew he needed money I would have loaned him the money because these places just make shit worse. He's uneducated, so he didn't know these companies were/are poverty pimps. I can't believe you are praising these people?!?
yoshi3329 I don't like these places at all either, but they do bring up an interesting point of "What are other alternatives for people to get money on a short term?" This is a need and the payday lenders fill it, so it will still be a problem unless someone funds an alternative or created competition with lower interest rates.
Man this did not convince me at all, in fact it convinced me payday lending should be illegal. According to her you need to money now, but the interest isn't addressed at all where it is unpayable back putting in the cycle. This happens to 90% of people within 60 days. Trusting people's judgment just isn't feasible when people don't act in their long term interest. Cashing checks for a small fee is fine according to her examples, but when payday lending comes out 90% of people are put into a cycle of dept it just isn't worth it.
Yeah, I read her book and I almost stopped halfway through but I figured I’d finish it to see if maybe there’d be valid points to take away from it. In my opinion, there wasn’t.
This video is old but still these evil places continue to prey on people. There is no type of good coming from these places. Maybe having funds immediately for an emergency may give you relief that minute but you’ll see yourself stuck in a constant web of insane interest rates (usually 40%+), stuck paying for years, and ending up paying damn near double what was borrowed at the end of the term. Shame.
I don't see an issue with Payday Lending or Check Cashing. What I do have an issue with is the percentages ($15 on 100)!!! and practices ($15 more the next month if you can't afford to pay it by next payday!!!). What kind of interest rate is that?! YES that needs to be regulated or restricted in some fashion at least. OF COURSE that is going to affect those below the poverty line the hardest. The service itself is needed. The predatory lending rates and penalties aren't.
you must charge an interest rate that accounts for bad debt. The good borrowers subsidize the bad borrowers. And you don't know who is good/bad until they've defaulted on the loan.
@@geoffl that is not what that interest rate is. THAT'S what makes it predatory. The profits for the company and losses for the customer are way out wack. It's at that amount, is not about covering their losses, it's about extracting as much profit as possible from the customers that WILL attempt to pay it back.
If you are responsible with your money, you won't need alternative banking services. If you are running your business so tight that you are depending on immediate client payment to pay or start another job, then you aren't running that business right. And its probably not profitable
It encourage bad planning by people who have already proven they cannot make good money decisions. I watched this hoping that I would learn something new. All I discovered what a bleeding heart attitude thinking that we can make people think as we do. The world needs ditch diggers too.
Yes I just got done dealing with these people you get in deeper and deeper and I have been told by the state of Iowa they are trying to get rid of these places they are to be used occasionally but somehow I got trapped in to use them every month since I'm on Social Security I just put my foot down change my bank account wrote them a nice letter explaining why I was not paying them this month. This is what the attorney told me to do I've always been taught to pay my bills but they just got ridiculous with their interest rates period. There are helpful if you only need them occasionally
People say that these businesses are exploiting people with problems. But that is how a business works, you find a problem that people have and offer a service or product to solve it.
Am sorry but no. Those businesses are taking advantage of the fact that many low income people are locked out of mainstream financial services. I get that a lot of people who need their money quick have check cashing places available but those places are just having people pay money on their money. There are places in the bronx (idk about other places) that offer free checking accounts and banks like capital one offer accounts without monthly fees. Lets support those businesses and lets push for transparency in the banks. And really payday loans have high ass interest rate. You imagine people who need payday loan benefiting from having to pay back money witha high ass interest rate.
I don’t know why he keeps saying the poor borrow money from pdl that not true I know people who makes 20 30 40 50 thousand a year and still go to theses places and still can’t payback the loan 👎🏿
This sounds great in theory, but when I did crowdfunding loans I understood why payday loan places exist. At least 60% of people won't make more then 1 payment on the loan. Its the 40% who I felt bad offering 20-25% interest that made up the difference. I had one guy who I gave $1000 of the the 30k he need for business loan.His lan was for 5 years. Didn't check that sight for years because so many people stiffed me, but that guy was a champ and paid every penny. I think he paid over $3k. I was super impressed.
It's fine in some ways. I signed up for a pay day loan at one point, since I wanted to order something and was getting paid in a week. They didn't make it clear they were going to seize all of my assets from my bank account. Ended up having to call the bank, and have someone there help me not pay them. I guess we just need a way to tell the good from the bad.
1.95% of $5,000 is $9.75, not $200. Any reputable national bank is going to pay him or credit his account in one day, not five. I thought he wanted to pay workers under the table? The float is a banking procedure for matching deposits from the check depositor with transfers from the bank issuing the check. What does that have to do with cashing a client's payment check at your own bank? Carlos isn't even poor.
Good grief, the sorry-assed arithmetic going on around here is about as sad as paying fifteen bucks to borrow a hundred for a couple of weeks. (it's $97.50) Anyway, the bank will credit you on the same day or next day only if you have enough money in your account to cover the deposit if the check bounces. These folks don't. If they're depositing a $300 check into an account that has five bucks in it, they'll have to wait several days until the check they deposited clears fully.
because, they, dont, have, money..... its not the banks that wont serve the poor people, its the country we live in. Start using the phrase "living wage" and your research will become much easier.
I’m still staying the hell away from these places and encouraging all my friends to do the same.
Payday lenders.
Untill it's an emergency and you don't have the money
@@dariocastro-lopez3589 then you end up in an even worse emergency a while later because you took these guys money
Whenever I run into trouble I lend money to myself from my emergency fund savings.
Well most people can't afford to save money.
I have a 65k loc for emergencies. Fortunately i haven't had to use it
@@austinhernandez2716 not even 5 dollars?????? Budgeting??
good for you, but some people don't just have any spare cash to dip into
@@austinhernandez2716 Sadly most people don't even make enough money to save anything. It's gotten worse as of 2024 with the rising cost of living with stagnant wages, and people are fed up.
Usually, it's the choice between taking a (often predatory) payday loan, or some other, unknown option or outcome. The fact that so many people choose the loan should speak volumes about the other option.
Its speaks more on ignorance and the ridiculous levels of poverty in the US.
The other option is probably a uncomfortable one, living within there means. Can’t go to the casino, buy new clothes you don’t need, can’t go eat out every day etc. Instead have to stay home after work and pay off other debts to get ahead. Yeah that doesn’t sound as easy or as fun as taking out a loan.
@@captaindestruction9332 you just said a lot of bs people are using them to pay rent, you can’t save if you don’t make enough. You people let the government take your rights away and destroyed the fucking economy but still say “oh just work harder” maybe change the bank laws to where people can get access to funds while still being responsible to pay them.
@@captaindestruction9332 Yeah, always blame it on them. In reality, their money goes to things like rent and medical bills.
Astute observation!
Heroin is also quite popular with consumers it doesn't mean it's fucking good for society or a thing we should praise.
Just my opinion that we shouldn't glorify those who take advantage of people.
+Mrs K OP is just the perfect person to make that judgement as you are the perfect person to call someone out on a perfectly rational statement.
But it is their body so it is their choice. If you want to put heroin in your body you should be free to do that as it is your body. By the way sugar isn't good for you so do you think we should stop people from consuming it? Transportation/driving is dangerous so should we outlaw driving?
You are partially correct.
You do have the right to shoot dope into your arm since you own your body. That's an awfully fine line to walk though. If you want to shoot dope and climb behind the wheel of a car and risk someone elses life because of addiction, you are going to be doing some time in prison, if you survive at all that is.
Lol that joke was also made by John Oliver on his show talking about payday loans
Moral of the story: don’t put yourself in a position where you can’t wait three days for your money.
What happens if you do though? Should they be left unprotected?
@@thetasworld you roll with the punches or work with whatever you owe to get them paid. You don’t go in to debt because of other bad decisions. Thats making a bad decision to try and fix a bad decision. Its stupid.
@@captaindestruction9332 so you wouldn't have the government intervene and help out in those cases?
if you can, though not everyone can
Fantastic way to just easily dismiss tens of millions of working class people. Nice job. 👍 No wonder socialist views are growing - especially amongst the younger generations that make proportionally less compared to older generations when they were young.
Carlos did not pay tax on the 5 grand and he paid his crew in cash and they didn't pay tax...overcoming the extortion...bravo
so... it's stimulating shadow economy and draining public revenue. but why then the authorities do so little about it? my uninformed guess is that republicans are too anti-regulation, while democrats fear to derail the illegal-immigrants economy
interesting hypothesis. and probably accurate.
and depriving them of the necessity of social services that will keep them alive once they are feeble and tapped of their labor and undermined construction standards, labor standards, public infrastructure and public education. They made themselves bondsmen.
LambChowder1 No. Save your money. Invest it wisely.
The government doesn't need to do it for you. If you're not intelligent enough to handle your own money, you deserve to starve in the street.
dondoes - Thank you, sir. I am so sick of people telling me that someone else will starve in the street. Go give to charity if you're concerned about that, but adults are not children. They can plan ahead.
I agree with PDLs being legal, but I strongly disagree with the title. PDL's are a terrible vice for pretty desperate people, but adults should make their own damn decisions. Booze, cigarettes, energy drinks, lottery tickets, drugs (when not medicinal use)...all vices, but best moderated by individuals.
+Doug Confere Which is fair enough, though it's pretty rare. The most common expense that can hurt someone who was even responsible is a medical emergency, but payday loans won't come close to covering that.
In most practical cases, PDLs illustrate the paradox of safety nets. They tend to encourage sloth, which creates a faux need for more safety nets.
They created more dept on small communitys with unstable job markets... loaned sharks is what they are. in 2008 this small town loan place gave a loan out for 360.00 on title loan ten years later after they sell this dept pushing the statue of limitations of seven years to ten they get there judgement of wage garnishment of 17000.00.ill never go to a loan place again they could have taken the car and profited but never came cuz they certainly got a better price.
They are legal loan sharks your on meth
@Doug Confere Most users (79%) of payday loan users use them on regular expenses.
@Inferno Payday loans are rapacious as loan sharking but with less threats of violence.
The poor are always the best targets for these payday loan agency's. It never ceases to amaze me how these companies are always in poor minority communities !!!
You go where your market is. There’s not a lot of demand for payday loans in Beverly Hills.
How in the hell are you helping a poor person when every $1 they borrow from you they owe you $4?
@Caligula Libertarians are the shiniest apples on the tree.
They aren’t, but I imagine that the types of businesses are the only ones interested in serving poor customers.
Gotta have good credit for a “real” loan.
@@jasonwang4487 I was being sarcastic, but that is on me.
@@jstevinik3261 ah, sorry. I was replying to OP. I sort of already guessed you were stating that with irony.
@@jasonwang4487 Alright.
There's way too much culture of debt in America.
I suppose next you’ll tell us about how great of an investment timeshares are, ooh and I bet you have an exciting ‘business opportunity’ for us too!
Funny thing is, I want to complain about this because that is the ideal. However.. I used a payday loan back in the 90's putting my car up as equity. It was an immediate emergency and I paid if off within a month. Fast forward two years and I used check cashing services for 5 years straight when I worked alongside visa migrant workers in a construction company. It cost me $2-6/month to use the service versus $16 a month to just to have a basic checking account. I established Wells Fargo (you know where this is going) shortly after so I could set up a paypal account for ebay. WF liked to hold transactions over and not apply them for weeks at a time....then during a short window when my account may have been just short of funds for whatever reason, they would apply the transaction and gouge NSF fees. Using check services work for people who are in my income bracket (I'm mildly disabled) and in the long run (as long as you're not a drug user or frivolous spender) you actually get screwed over less.
You could join a credit union or a less shitty bank
Credit Unions people.
Payday lending is a predatory practice that almost always leaves its participants worse off than they began. It's a "free market" alternative to poverty prevention programs that might actually help people to turn around their finances rather than entrap them in a cycle of debt.
Um explain? I’m going to level with you, this is at the least just an absolutely asinine claim.
Read the book last year. Some of the people making ignorant comments should read it also.
Years ago, when I was going through a mental health crisis, I had a short-term money crisis. I used a payday lender to get me over a rent emergency. Because I was self employed as a taxi driver, by working a couple of extra hours each day, I was able to make an extra $800.00 or so for a month to pay back the loan, and not need to revolve it. But I had to have that loan. If I lost my apartment, I'd still have a job, but I would have had to move into a daily or weekly pay motel room. My very nice studio apartment was $450 at the time, and the cheapest, shittiest daily or weekly pay equaled at least $1100.00 per month. I saw plenty of cabbies with poor money management skills end up going that route, and with many of them never be able to work hard enough for a long enough period of time to put together the nut necessary to move into an apartment.
The loan? $500.00. The payback? $575.00. That $75.00 in gross fees saved me at least $600.00 extra per month into the far foreseeable future. Who go the better end of the deal? If you say "The payday lender, of course," you'd be wrong. That company made $75.00 off me, and I saved at least several thousands.
I live in Arizona, where payday loans are no longer legal, with interest rates capped at 36%. However, the change in law doesn’t mean that all short-term lenders had to close. Some businesses continued operations by offering other products and services that are permitted by state law, such as installment loans. Lenders can no longer advertise the availability of short-term loans, with the exception of tribal lenders.
But this change in the law has cut many people out of the market. A person who is worth a risk/reward interest rate of 150% might not qualify for a 36% loan. So what is this person's option? A car title loan, which is just a fancy way of saying, "We'll lend you $1500.00, you pay us $200.00 a month for 10 months, and in the 11th month you make a final payment of $1500.00. You'll do that deal, right?" But people jumped at the chance to risk losing their vehicle in this manner. Once, after a hospital stay of almost two weeks, I went to a title loan company for a $300.00 loan, with the total of payments over ten months of $500.00. (To avoid a balloon payment. I shopped around for a company that did not allow balloon payment loans, so that I wouldn't be tempted to fall into the minimum payment trap.) I was amazed when I found out that they had only one cashier taking payments, SIX combined "appraisal and loan officers," and a manager that floated between the two positions if and as needed. Appraisals took about five minutes. To pass, a vehicle only needed serviceable tires, all accessories to be functional, all lights working, and an easy start and idle. And the loans are nowhere near the max equity in the car. In 2008, my $300.00 loan was the maximum available on my paid-off 1996 Crown Victoria Police Interceptor with a wholesale value of $1500.00 per the blue book pricing guide. Since the loans were 5X collateralized (available equity being 5 times the max loan offered on a vehicle), everyone, and I mean everyone, who wanted a loan got one. No visible means of support or ability to pay? Meh.
Are these businesses abusive and predatory? Almost never from the point of view of the customer. And the whole idea that the poor are generally stupid or incompetent with their money has to go away. What little resources that a poor person has are generally handled better by them, than the much larger incomes of the average middle class person. Sure, a lot of poor people have no savings. Just like a very large percentage of the middle class. Show me a poor woman with a $150.00 hair weave, and I'll show you five middle class earners with a $150.00 Starbuck's monkey on their back.
thanks for sharing this story. A lot of people imagining what happens in these situations. You've lived it and provide real data on what is going on.
I think the biggest problem is that people are not budgeting and managing their money properly.
“Help the poor”? Don’t make me laugh; we borrow money and then the interest steals our next few years worth of pay checks and we’re further in debt than ever before.
It's debt now or more debt later that's all.
I never pay the minimum due on anything.
Julianna Okike I pay the full statement on my credit card
High interest loan sharks do not help the poor. Helping the poor would be teaching them how to manage their money better...or how to fight for a better wage.
You are making a false dichotomy here. There are numerous ways to help people. Giving them a badly needed short term loan when no one else will is helping them in many cases.
Credit cards are basically free monthly loans. As long as you pay it in full every month there’s no interest.
Not everybody can get a credit card. A payday lender will loan money to anybody with a pulse and a checking account.
@@mikemayo4812 yeah and that's the problem. That's exactly the reason why the us housing market crashed in 2008. They gave everyone with a pulse a home mortgage with variable interest rate, and as soon as those got up it blew up.
Interesting topic. It is good that Reason is letting unpopular opinions into the air and challenging the prevailing wisdom.
This is the first time I've totally disagreed with a video on here. These places are loan sharks they trap the poorest people in endless cycles of debt. This was even acknowledged in the video. I've seen people lose their cars because they were desperate and took a title loan. They paid back the principal but the interest was just so high they couldn't keep up with it so their car was repoed. Imagine what that does to someone that's already barely hanging on.
I want to get rich and stand outside of one of these just handing out money enough to pay off pepoles debt and cover what they need and try to make pay day lenders go bankrupt
Payday lenders just makes the poor even poorer.
What this lady ignores is that when she talks about people paying to take money off cards, it is often for drugs, if u dont do drugs how many daily purchases can you think of that you cannot use a debit/credit card for? Few if any
I’m a social worker and I trained in south Bronx loved every minute of it
You can argue that there is an underlying problem but if I made that argument for pain management say "give me heroin" no matter how right I am about pain, I will not be better off with heroin. Besides, the underlying problem is poverty. You can't loan your way out of poverty.
"Don't judge the people that take the loans." Oh really? So if a snake oil salesman says that, would it be believable? I don't think so. It's the industry being judged not the people they prey on. You wouldn't normally pay $10 for a bottle of water but if that or dying of thirst you would. They are not bad/stupid people, just desperate. Poverty does that.
"You can't loan your way out of poverty."
But you can loan your way into it.
Your 10$ bottle of water analogy is spot on.
ya the bottle of water analogy is perfect
+TheAtheistPaladin Well the solution is not you judging, which is cheap. You should be there selling the bottle of water at less than $10. Do you ever wonder why no one is doing that?
because personality types that are correlated to go into business are less compassionate [openness] and more conscientious and choleric. and, i say this only from business people and types i've met so this part is less data more relative, they tend to be borderline sociopathic as well, ie two faced, back stabbing, double dealing and double crossing
lol easy troll is easy. i'm a libertarian you gobshite. maybe try harder or step out of the cage of your ideology. collectivist HAHA oh my god that was priceless.
1.95% of $5000 is $97.50, not "almost $200." You'd think that someone who worked as a teller at a check cashing place would be better at arithmetic.
True
No mundane pro pot story this week? This is the libertarianism I like, "defending the undefendable"
The Title should say How Payday Lenders & Check Cashers Help the Poor Become Homless
It lets you skip taxes.
Arvind Talukdar How does using a payday lender let you skip paying taxes?
Taxation is theft
The high interest is what Dave Ramsey calls "stupid tax"; a tax for being stupid.
i liked the talk. it does seem odd that it takes a week before you have access to your money.(check)
dark light Unfortunately banks, retail banks, that is, have a monopoly. There is no reason except greed that keeps them from giving you your money when you want it. I can understand having to verify a check before cashing it, but five days is ridiculous.
I use online banking almost exclusively and haven't seen the inside of a bank in at least a year.
If I have a bill due on a Saturday, Sunday, or holiday, I have to pay it on the previous day. Even though I pay it using their app or site with my computer or phone. It's just a computer sending payment to another computer, why does it care about weekends or holidays?
No one has to manually deposit a check and no human touches the payment in any way.
It's a huge revenue booster for the payee, they get their payment early and I lose the interest for that time.
Scam!
I was also surprised by the comment that there are apps that allow you to access and transfer your own money instantly whenever you want for free. Why can't you normally do this in the US if you have a savings account?
They keep the poor poor, that’s how they “help” them
Ehh. I feel like lumping together Check Cashing services with Payday Loans is like trying to lump together Marijuana and Fentanyl. Like... they just aren't the same in the potential harm they cause.
I have been inspired to open my own start up one of these places
The piece is incredibly tone deaf. Yes, these lenders serve an underserved population. The problem is these lenders are basically skimming off the top from the underground economy. Romantacizing employers who duck payroll taxes, Social security, workman's comp, and disability obligations aren't heroes.
Of course there's not a single mention of individuals who work under the table to duck alimony, child support, or court judgments, or a further examination of how this subculture of undocumented/non-traditional workers artificially suppress wages and create an unlevel playing field in low income communities that suffer desperately for not being a part of the mainstream economy.
No way to spin this in a positive light. This is taking advantage of the poor and I have studied business, finance included.
Let's call a spade a spade.
HisReverence I guess the point of the video was that the payday loans are filling a need, but I think in a bad way. Where else would people get money on a short term? We need an alternative or a place that charges lower interest rates.
@@marism6787 the need should not exsist
So.. they're still horrible and predatory, but they're the best option for some people? This isn't a very strong argument in their favor.
500s? Try lower in some cases.
So because it's technically voluntary it can't be predatory? Do drug dealers not take advantage of their addict customers?
Addicts to PSL's must be a hell of a drug.
Banking is a service and it costs money. So unless someone is willing to provide it for free to low income people, these businesses will continue to exist.
This is mafia like lending ! Unbelievable. I know people who have used these places. They have no idea how bad they are getting ripped off.
On the other side of the coin, people must learn to live within their means, learn to budget their money and avoid ALL debt. Credit card, payday loan and the like.
This is bullshit. I was hit with hard times and hit with 300% interest on a payday loan that completely burned me. It makes a bad situation worse in the long term. You're literally telling the best case scenarios and ignoring the big pictures.
Great Video. I am using it in my High School Financial Literacy class! I prefer to show multiple sides to a story so my students can make decisions based on facts, not one side of story.
I'm glad she didn't do the heroic liberal non academic, flawed Barbara ehrenriech approach
I was always bothered by the term “predatory lender” because it presumes that poor people are stupid or naive. They “target” poor people. Well, every business I know has a target market of people who want their products or services. McDonald’s targets hungry people with little concern for their health. Are they a predatory restaurant?
This video may have just destroyed the last shred of respect I have for "Reason." While payday loans might be necessary for some people they need to be regulated to protect the uneducated and minimize their ability to financially cripple those who use them.
Your first mistake was respecting _Reason._ The entire libertarian position relies on fucking over poor people.
This is proof that we should transform the post office into banks too. So people can deposit/withdraw money without any fees and the post office is everywhere
Motionless Puppet That sounds ridiculous
Oh Whatup says:
"That sounds ridiculous"
==
When the social classes become rigid, poor stay poor and rich stay rich because poor have more burden than rich, the society fails to become prosperous.
"History of the Republic of Venice"
en.wikipedia.org/wiki/History_of_the_Republic_of_Venice
"La Commenda"
blog.supplysideliberal.com/post/46499129502/the-rise-and-fall-of-venice
Th city became awful rich because the poor found the way to get ahead.
And this is good for the poor because? And this is better than micro lending because? If you got rid of every payday lender yo would have gangs loansharking to how working poor and lower middle class. If you had honest micro lender, you would have neither mob lending or payday lenders. Jeez we can do this in Bangladesh but not Detroit? Of course if we have honest bankers we'd need none of he above.
Start a mircolending business. Im sure its super easy.
Mrs K - There is no security for micro loans. This just usury.
The weak minded - since you are smarter than me you do it, go on - put that attitude to work.
No Mrs K -- I think we should screw people whenever we can and call it good business. I especially think we should do to tho those who can least afford it. If someone has a chance, take it from them. If crawling, kick them in the head. Hell if they get poor enough you can march in there, all righteous, singing Christian songs and take their kids and send them to perv foster prisons. Hell in Arkansas we can put them in debtors prisons (I think it's Arkansas) . Nobody is that stupid to equivocate the way you do. wait, I guess there are two of you.
This hurts poor people. I've lived all over the world, and seen all kinds of lending practices. We did a study on the poor and lending. It was an experiment on a new cloud-based data analytics platform we built. Sure it was cool, the computer was novel, the cloud architecture, the power, the young freshly minted PhDs. And I mean under 26. Here's the funniest part - the young folks (and these are Cal Poly, Harvard, MIT, RTI, and other lesser hailed schools) notion of poverty.
They opined that microlending had little effect as it did not lift people out of poverty. You know now a little about my attitudes. I asked them how they defined poverty. In one case, in equatorial Africa, a man borrowed money to put a new roof on his home. They said see, that did help.
Need I continue.
You would be better off if you use your credit card instead. Payday lenders are loan sharks.
I did a payday loan one time. At Grace period too the people there tell you how long it will take to pay it off and there was a limit based on your income at the time of borrowing.
Banks help the rich get richer. Payday lenders help the poor get poorer.
I used a afs once because they gave me a loan when I was only working for 1 month, the bank wanted 3 months of employment. After 3 moths I got a low interest loan to pay the afs loan.
If there are helping the poor, why don't they openly advertise their effective interest rate? In Ontario, Canada, I have calculated and confirmed the rate to be 3,724%.
Banks have left low income neighborhoods. Bank won't cash checks of low income people. She made no mention of the high interest rates. Did you know that Bank of America operates Check Cashing Outlet?
You guys really lost some credibility with me on this segment.
Well, I do admire Reason for takin' on those hard sells....I guess
Unbelievable how different the US really is in comparison to other parts of the world.
I haven't seen a check in years. I don't even use cash anymore, only debit cards.
It’s because these people owe a bank money from a previous account they screwed up by letting it get a negative balance and not paying it back. Now no bank will touch you until you repay what you owe.
Unfortunately most Americans use cards instead of cash, world would be better with people using mostly cash
@@dogguy8603 LOL no, having cash is not as safe as you think. at any moment the government of any country might change the legal tender, lets say that the Turkish decide to stop using the current Turkish Liras and instead from next week the only legal tender accepted will be the New Lira and the exchange rate from the old lira to the new lira devalues everyday until it will be worth nothing by next month, then what?
This exact same situation happened in Venezuela 3 times over the last 20 years, they have relaunched the Bolivar 3 different times and deemed the old Bolivares worthless, Brazil did the same in the 1990s when they replaced the Cruzeiro with the Real... the list of tricks and flips using cash is long and bad.
The only protection against government overreach in regards to currency is decentralized currencies not managed by governments... like Crypto, or silver based currencies (gold is too rare).
@@pedrolopes3542 lol you act like crypto is free of government influence or tracking, btc is more tracable than cash lol. If the USD went the way of the bolivar, then we will have way worse problems than deciding which currency to use. You cant eat silver, you cant eat crypto
We I never gave the Check Cashers much thought, since I do direct deposit, heck I hardly ever write a check anymore. Just two this year so far, 30 years ago it was all I did, write checks balanced the checkbook once a month when I got my statement in the mail. Now I just do it online, I use a Debit card, I pay all my bills on line- I balance my checkbook every day. Mostly to catch anything strange or if my accounts have been hacked. I used a PDL once, I can understand the need for such things. I don't use them. But they are there should the need arise.
So take the example of the guy who needs to fix his car now or he'll lose his job.
Ban payday lenders, now that guy is unemployed. You're "helping", statists!
Technoguy3 he gets the loan and saves his job, fast forward two months, he owes his check to the lender just to cover the interest, loses house and job.
But it's his to loose and if he wants let someone use him in that way, it's his business.
He is in a better position to determine whether the loan is a good deal for him than you or I.
+kandysman86 In one situation, he has a chance to save his life. In the other, he doesn't. Payday loans are not supposed to be kept for months
They should honestly be illegal. I like a majority of ideas from reason but this is not one. Just open a bank account and a few credit card accounts and budget and find ways to make money. Not that hard. Just got rid of taxes and we wouldn’t need payday loans
If they wanna "help" these low income families how about they educate them on financial Literacy and budgeting? These loans don't help 🤔
The borrower os slave to the lender.
What a bunch of hoohaw. She's only addressing the demand for it, not how borrowers are going to pay it back when the interest is so high and they're already poor...
A good piece of journalism with an outstanding field researcher. Kudos!
How sharecropping and company towns help the poor
Exactly the libertarians are dead wrong here.
Every example in this video is just showing that people don’t know how to manage your money.
If you need to use this services to pay your employees, your doing something completely wrong.
If your use this service to bank roll your next job site. You need to learn how to manage your money.
It amazes me how many people don’t know how to manage your personal momey. No wonder this country is so far in debt personally and with the government.
0:00-0:03 They are better known as payday lenders because "alternative financing" is euthanistic af.
0:03-0:20 They are popular because many ppl are financially illiterate by not comprehending that the high interests would worsen their financial situation in the long long compared to any predicament that inspired them to use such credit. Hence, the satire against these loans.
0:21-1:10 Ppl do not need loans that would give high interests that would worsen their conditions in the long-run. PPl do not need credit for consumption because that spending does not even net increase growth. Consumer credit, even credit cards, are bad for consumers and ppl would survive better (in the long run than without).
1:11-1:34 Has she considered financial illiteracy as the primary reason ppl use these services and not knowing better alternatives such as budgeting contacting billers and negotiate plans.
1:35-1:50 Credit Cards grew over the years yet ppl put themselves into unnecessary consumption debt. An increase in demand does not mean the service is good.
1:51-2:45 Middle income can be financially illiterate too, hence credit card debt, title loans, time-shares, and buying/refinancing houses. Poor ppl do not comprehend the long term consequences of bad financial decisions. Payday loans advertise as "quick cash" because financially illiterate are enticed by the convivence, regardless of consequences, and cars first promote "monthly payments".
2:45-2:54 She is using anecdotes to support her position, which is bad since she did not verify if her expeicnece can be a functional sample.
2:55-3:55 They are only providing a service that charges high interests, which worsens their clients' financial predicaments in the long run.
3:55-5:04 These clients are not taking into account how bad the interests are on these loans, they are only thinking about the "quick cash". Banks are better in the long run due to not using high interest rates (even taking fees to start an account). If people understand how bad these loans are, they prefer literally any other option. Financially illiteracy is the reason ppl fall for them. Service cannot be quantified and choosing finances based the niceness of clerks is stupid af.
5:05-7:13 Anecdotes aside, it financial ergriosus for Carlos to use payday loans instead of a bank account, which provides sufficient credit than a payday loan. Also, the guy should not undocumented people since it cheats society. The guy could have used money to save, re-invest in his business than interests higher than those provided by a bank.
7:14-8:48 According to Pew, 79% of ppl's payday loan is for regulatory expenses, i.e. an electricity bill. On the last part, yes, this why the interest is bad since ppl would more behind expenses and resort to more credit.
8:49-9:35 The same Pew Study said that if paydays loans were not an option, ppl would resort to a combination of tactics, such as cutting expenses, barrow from friends/family, sell possessions. Also, there are other solutions. Maybe use the post office as a public credit union. Or even better, nationalize, collectivize, and de-commodify the economy that would not operate for profit and would reduce/eliminate the issues that ppl have for regulatory expenses.
9:36-11:05 This sounds good, but this is referring to online money transfer services, not quite the same but in a similar ball-park as payday. This has nothing to do with lending.
11:06-12:05 There are tons of financially illiterate ppl who use banking, but use credit on consumption, i.e. credit cards. However, ppl who resort to other sources of credit are doing for financially illiterate reasons, as explained earlier.
12:06 to end Her financial services are not lenders. As far as I can tell, she is not using her account to use credit on consumption, so I hope she instills this value onto her kids. This comment has gone for too long now. Good day. Please reply.
Alternative title: Why misery is great
I agree with the notion that it's good for people. It's a last option. I have a bill that needs paid and they will give you money in exchange that you pay it back asap. If they did not put extreme interest rates on those small loans, people will just not pay it. It forces them to make sure they pay back that loan.
glanemann and they do everything they can to get u to just extend the loan, the are parisitic scumbags. but it's no one's business what they are and it's well known how shitty they are so people should no better. If our central banking system wasn't a monopolistic parisitic rash on our ass, this wouldn't be a problem either. but it's not our job to shut down a business people want to use.
What happens when they don’t or can’t? They are more fucked than if they simply where late on a bill. Its awful because it fucks over desperate people.
@@captaindestruction9332 you can declare bankruptcy
Isn't it very similar to how people get caught in credit card debt? People walk around with thousands of dollars of credit card debt at 20-30+ percent interest, but that's okay? Providing the same basic tool to someone who either cannot or does not want a credit card seems a bit misplaced. Life isn't perfect, not everyone has a rainy day fund, you got to do what you got to do.
I see this comment is old, but I still feel need to reply.. No one is saying credit card debt is ok. However, those percentages are misleading due to a difference of time frames. Credit cards come with an ANNNUAL percentage rating between 15 and 35 percent which is awful. Payday loans tend to come with fees of $15 for every $100 borrowed, so 15%? But remember that loan needs to be paid off within two weeks. If you adjuast the time frame to make it an annual percentage rating, that comes out to 391%.. more than 10 times worse than credit card debt. The idea of a payday loan isn't wrong, but the practice is ALWAYS predatory. You cannot make money off of the poor without taking everything
800 percent interest is not screwing poor people they're helping poor people by talking all there money. It makes sense right. They are hero's 🤮🤮
Im on my way to a payday loan place. Hope they hook it up with 3 hundo
One of my old friends used one of these check cashing places and had to declare bankruptcy at the age of 24. He borrowed $500 and paid $1500 for that one loan. His life is RUINED for the foreseeable future. And he's so young. I felt so bad for him. If I knew he needed money I would have loaned him the money because these places just make shit worse. He's uneducated, so he didn't know these companies were/are poverty pimps. I can't believe you are praising these people?!?
yoshi3329 I don't like these places at all either, but they do bring up an interesting point of "What are other alternatives for people to get money on a short term?" This is a need and the payday lenders fill it, so it will still be a problem unless someone funds an alternative or created competition with lower interest rates.
Lex Luther supports payday lenders? Surprise surprise
Man this did not convince me at all, in fact it convinced me payday lending should be illegal. According to her you need to money now, but the interest isn't addressed at all where it is unpayable back putting in the cycle. This happens to 90% of people within 60 days. Trusting people's judgment just isn't feasible when people don't act in their long term interest. Cashing checks for a small fee is fine according to her examples, but when payday lending comes out 90% of people are put into a cycle of dept it just isn't worth it.
Yeah, I read her book and I almost stopped halfway through but I figured I’d finish it to see if maybe there’d be valid points to take away from it. In my opinion, there wasn’t.
That title is such CLICKBAIT!!!! Payday loans aka Legal loan sharks
What do credit unions bring into this argument. They offer savings and checking with same day availability.
She shouted out xrp!
This video is old but still these evil places continue to prey on people. There is no type of good coming from these places. Maybe having funds immediately for an emergency may give you relief that minute but you’ll see yourself stuck in a constant web of insane interest rates (usually 40%+), stuck paying for years, and ending up paying damn near double what was borrowed at the end of the term. Shame.
I don't see an issue with Payday Lending or Check Cashing. What I do have an issue with is the percentages ($15 on 100)!!! and practices ($15 more the next month if you can't afford to pay it by next payday!!!). What kind of interest rate is that?! YES that needs to be regulated or restricted in some fashion at least. OF COURSE that is going to affect those below the poverty line the hardest. The service itself is needed. The predatory lending rates and penalties aren't.
you must charge an interest rate that accounts for bad debt. The good borrowers subsidize the bad borrowers. And you don't know who is good/bad until they've defaulted on the loan.
@@geoffl that is not what that interest rate is. THAT'S what makes it predatory. The profits for the company and losses for the customer are way out wack. It's at that amount, is not about covering their losses, it's about extracting as much profit as possible from the customers that WILL attempt to pay it back.
@@MugenNiFukuzatsuna i just looked at one of these businesses for sale this morning. 10% profit margin.
@@geoffl Then their charges are definitely not 15$ on the 100 and 15$ each month late.
If you are responsible with your money, you won't need alternative banking services. If you are running your business so tight that you are depending on immediate client payment to pay or start another job, then you aren't running that business right. And its probably not profitable
It encourage bad planning by people who have already proven they cannot make good money decisions. I watched this hoping that I would learn something new. All I discovered what a bleeding heart attitude thinking that we can make people think as we do. The world needs ditch diggers too.
Yes I just got done dealing with these people you get in deeper and deeper and I have been told by the state of Iowa they are trying to get rid of these places they are to be used occasionally but somehow I got trapped in to use them every month since I'm on Social Security I just put my foot down change my bank account wrote them a nice letter explaining why I was not paying them this month. This is what the attorney told me to do I've always been taught to pay my bills but they just got ridiculous with their interest rates period. There are helpful if you only need them occasionally
If big corporations hate it, it's probably the best thing ever
If the people don't need/want these services, they will not go in the door. Let the market shut these places down. If not, let them roll on.
Nononononononononno! Thats not going to happen bc it gets ma feelings hurt
well said elmo 😘😁
People say that these businesses are exploiting people with problems. But that is how a business works, you find a problem that people have and offer a service or product to solve it.
Abolish legal payday loans and you will force the poor into the arms of really nasty loan sharks.
.....
What the fuck.is the difference
Hello! I’m in Mr Allen’s class
Am sorry but no. Those businesses are taking advantage of the fact that many low income people are locked out of mainstream financial services. I get that a lot of people who need their money quick have check cashing places available but those places are just having people pay money on their money. There are places in the bronx (idk about other places) that offer free checking accounts and banks like capital one offer accounts without monthly fees. Lets support those businesses and lets push for transparency in the banks. And really payday loans have high ass interest rate. You imagine people who need payday loan benefiting from having to pay back money witha high ass interest rate.
I don’t know why he keeps saying the poor borrow money from pdl that not true I know people who makes 20 30 40 50 thousand a year and still go to theses places and still can’t payback the loan 👎🏿
They only help as an example of what _not_ to do.
Crowdfunding is very long but at least it safety, came from good people's with kind heart, and capable not repay without punishment fees
This sounds great in theory, but when I did crowdfunding loans I understood why payday loan places exist. At least 60% of people won't make more then 1 payment on the loan. Its the 40% who I felt bad offering 20-25% interest that made up the difference. I had one guy who I gave $1000 of the the 30k he need for business loan.His lan was for 5 years. Didn't check that sight for years because so many people stiffed me, but that guy was a champ and paid every penny. I think he paid over $3k. I was super impressed.
$5000 * 1.95% = $97.5, not $200
Matt Jones That jumped out at me too
MNRAZORBACK ... it was 4%.. so.. the lost was extreme...
All the benefits she discusses wouldn't be a problem if more businesses could do direct deposit
It's fine in some ways. I signed up for a pay day loan at one point, since I wanted to order something and was getting paid in a week. They didn't make it clear they were going to seize all of my assets from my bank account. Ended up having to call the bank, and have someone there help me not pay them.
I guess we just need a way to tell the good from the bad.
It is called reading the contracts you sign
I still didn't have to pay the loan, since the bank intervened. They did not even send a loan at any point.
1.95% of $5,000 is $9.75, not $200. Any reputable national bank is going to pay him or credit his account in one day, not five. I thought he wanted to pay workers under the table? The float is a banking procedure for matching deposits from the check depositor with transfers from the bank issuing the check. What does that have to do with cashing a client's payment check at your own bank? Carlos isn't even poor.
Good grief, the sorry-assed arithmetic going on around here is about as sad as paying fifteen bucks to borrow a hundred for a couple of weeks. (it's $97.50)
Anyway, the bank will credit you on the same day or next day only if you have enough money in your account to cover the deposit if the check bounces. These folks don't. If they're depositing a $300 check into an account that has five bucks in it, they'll have to wait several days until the check they deposited clears fully.
because, they, dont, have, money..... its not the banks that wont serve the poor people, its the country we live in. Start using the phrase "living wage" and your research will become much easier.
how is 1.95% of $5,000 = $200?? am I missing something?
Compounded interest.
Oh and this interviewer... I just don't know.
Love the argument "well he has to pay his undocumented workers" ... alrighty then.