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S01.E14: Payday Loans

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Anybody else think the subject matter was dry? I tend to tune out except for the jokes. And Sarah Silverman doing everything short of working Montel Williams over with a lead pipe. That was funny. Ditto with the dancing chicken and soybean.

Edited by Lantern7
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Anybody else think the subject matter was dry? I tend to tune out except for the jokes. And Sarah Silverman doing everything short of working Montel Williams over with a lead pipe. That was funny. Ditto with the dancing chicken and soybean.

I guess it depends what you are looking for. I'm always pleased and surprised at how much substance they squeeze in. On the other hand, I did think the comedy this time was weaker than usual. I'm not the biggest Sara Silverman fan. Potayto/Potahto.

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I enjoy Ollie's earnestness.


I just changed all my passwords after the Heartbleed issue. I don't want to have to change them all again so soon. I feel whiny about it, because it's true it shouldn't be that big of a deal and it isn't all that hard. But I still hate it. I don't want to change the lock on my apartment door this often either.


I like the proposal, to replace the payday loan industry, that post offices begin to offer banking services at a reasonable rate. This would also bring revenue to the post office system, and could theoretically stave off the closing of rural post offices. It's become a huge problem in rural areas, that they are closing the post offices. My town doesn't have one anymore and the next town over, where folks have gone since ours was closed, is now being threatened with closure as well. Since the same places often also lack banks, it's a perfect opportunity. Elizabeth Warren (my Senator and my hero) has been championing this notion.

Edited by possibilities
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From the clips they showed, apparently CBS did a story on payday loans, but I wasn't aware of it. I found the story very interesting and head-shaking. It truly does seem unstoppable.


I've heard about the post office idea, possibilities. It seems like a great way to deal with this.

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What I got out of the story was the politicians are pretty much openly disregarding conflicts of interest. That's fundamentally the only thing you would want out of a politician and they can't even do that. Shameful.


I like everything Silverman so I loved her commercial. (She can pee on me anytime.) I totally could get that she's having a legit conversation about whether the use of motherfucker v cunt would be more effective. 


If, you're old, take things. That was the best line. 

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I definitely laughed at John saying he knows he should change his passwords but doesn't want to, because I have only changed about half of mine, and then my brain was fed up with it. I know about password managers; they just seem vulnerable to me. I'm still figuring out what I want to do. The only suggested password I can remember seeing in the scroll was MichaelBayModernFellini.
The payday lending story was, of course, depressing. Gary Elkins "earned his B.S. in Practical Theology from Southwestern Assemblies of God University." What a moral, Christian man he is! Rep. Gary Elkins’ Payday Loan Business Faces Criminal Prosecutions - I hope he loses.

Edited by dcalley
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I definitely laughed at John saying he knows he should change his passwords but doesn't want to, because I have only changed about half of mine, and then my brain was fed up with it. 

The basic suggestion on how to form new passwords was actually a good one, and in line with the most up to date thinking (long but easy to remember rather than short and cryptic). The problem is, that many sites still don't permit passwords like that, requiring some special characters, or only allowing 8 characters, etc. So, it is an aggravating process, even if we really should be more careful about it.

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It should come as no surprise to anybody that the Texas legislature is corrupt as hell, but the problem isn't unique to Texas, because that's pretty much how government works everywhere, even on the national level. People are put in charge of "regulating" industries when they have clear and proven ties to the very industries they're supposed to be policing, and vested interests in not regulating those industries. It makes my head spin, and the "hiring a dingo to babysit" analogy is spot-on. Funny as the piece was, the overall message is depressing as hell. 

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Yeah the material wasn't exactly a laugh riot this time out, but John Oliver still did a super-solid job with it.  It's just so deeply unfunny at its heart, is all, and that makes it challenging for comedy.  It's hard to yuk it up when the subject matter is exploiting the desperation of people trying as hard as they can to make ends meet and working their butts off, while other people profit off their struggles to survive, pay bills, and buy food.  


I mean, I narrowly avoided bursting in to tears at points, because its so damned disheartening I can't imagine trying to write jokes about rampant and obvious corruption, as well as elected officials acting like vampires.  


As for the password thing, I dutifully change my passwords every time there is a data breach, but I think part of what is slowing most of us down on this one is that it's apparently an endless cycle.  So I passworded the living hell out of my life for heartbleed, and the one before that and I'll doubtless do it again for whatever comes after this too. but after a certain point it doesn't feel like we're protecting anything, it just feels like we're expanding the data that some hacker has about us anyway.  Like I'm freshening up for the group of Latvian hackers that will likely descend next week, only to be followed by a gang from Sao Paulo the week after, with the come from behind kids from Perugia rounding out the month.  


Like I'd hate for them to get bored or something.  

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Payday lenders are the scum of the earth and Montel Williams should burn in Hell for acting as their acolyte.


Seriously, how is this even legal in a civilized nation?

That statement pre-supposes that the US is a civilized nation.

POs in England offer a variety of simple financial services, so it's not like uncharted waters. (Of course, they're soshalust there...)

I went to Secondary School in Ireland.  My dad sent my living expenses to an account that I & the Aunt who was my guardian there could access.  I kept my 'pin money' in a Postal Account.


iMonrey,Regarding legislators being entirely in the pockets of donor companies, in '09 or '10 I wrote a paper outlining the '08 downturn and in my research came across this article: Revolving Door, Bailout Edition.  Doesn't matter what level of government, or what state/constituency, or what party.  And, sadly, it's not just banking: it happens in pharma, agriculture, construction, etc.

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Conflict of interest isn't limited to legislators or agency administrators.  Supreme Court Justice Clarence Thomas has ruled on a couple of cases where either he, or his wife, had a financial interest as well.


Payday loans prey on the poor, that's why they are allowed to exist.

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“At the time [the City Council] happened to be talking about banning payday lenders in Menlo Park, so it was really timely when you did the bit,” Carlton said. “We watched and we listened very closely, and asked some questions in the City Council meeting — some based on the information you provided.”


The City Council ended up passing an ordinance that bans payday lenders, which offer quick cash at very high interest rates.


“That’s amazing!” Silverman responded.




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Payday loans may be the least popular financial product since subprime loans. Google finds them so distasteful they have banned payday lenders from advertising on its sites. The New York Fed says, “Except for the ten to twelve million people who use them every year, just about everybody hates payday loans.”

Payday lenders days may be numbered. The Consumer Financial Protection Bureau proposed new rules to end payday debt traps. Unfortunately, this well-intentioned policy may leave the neediest borrowers with worse options.

Payday lenders offer credit to low earners who can’t get credit elsewhere or don’t have formal banking relationships. The loans are normally extended for one pay period, about two weeks, with annual interest rates approaching 400%. If the loan can’t be repaid in two weeks it can be rolled over into a new loan. About half the loans are paid off within a month, but about 20% are rolled over at least six times.


If you see payday lenders as usurious, drumming them out of business may be a good solution. The popular English comedian and commentator John Oliver argues any alternative is better, but he’s wrong. New York Fed studied what happened when Georgia and North Carolina banned payday lenders from 2004 to 2005. Households in those states bounced more checks, had more problems with debt collection, and had higher rates of bankruptcy. In Georgia, the payday ban is associated with $36 million in bounced check fees.

The New York Fed urges caution before adopting regulation. Multiple debt rollovers are a problem, but it is not clear if borrowers are totally naive. The CFPB regulation raises murky questions about how far regulators should go to prevent people from making seemingly bad financial decisions. There may also be better alternatives. In Atlantic magazine this month Bethany McLean describes how Colorado extended the length of the loans from two weeks to six months. That led to lower fees, fewer defaults, and a viable business model for the only lenders willing to offer credit to the neediest.


Poor people may be even worse off under the new payday loan rules

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The future looks grim for payday lenders. Comedian John Oliver has had them in his crosshairs since 2014, attracting millions of viewers and stirring up plenty of outrage. President Obama began expressing concerns about their exploitative lending practices last spring. Google announced last month that it would no longer allow payday lenders to advertise. And now federal watchdogs have unveiled new rules that would dismantle a business model that often traps borrowers desperate for cash in cycles of spiraling debt.

"The very economics of the payday lending business model depend on a substantial percentage of borrowers being unable to repay the loan and borrowing again and again at high interest rates," Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), told the New York Times.


"I applaud what the CFPB is doing," says Joe Bayen, cofounder and CEO of a fintech startup called Lenny, which offers young borrowers credit lines up to $1,000 and a chance to improve their credit scores through a partnership with FICO. "We offer increasing balances based on how a user behaves. Everything is aimed at upward mobility and helping people."

Payday lenders are "preying on this poor, uneducated market," Bayen says. "What we do is the opposite."


Given the size of the market, it's no wonder that companies of all shapes and sizes have been closely watching the CFPB's research and deliberations. Last week, when the proposal was unveiled, startups greeted the 1,300-page document with relative enthusiasm while payday lenders and banks expressed dismay. For payday lenders, the rules would squelch the business practices that allow them to make a profit. For banks, the rules present a daunting obstacle course of regulations.

"While the bureau has frequently expressed interest in expanding banks’ trusted role in this market, the proposal fails to do so in a meaningful way and will significantly limit the availability of small-dollar credit," Virginia O’Neill, who heads regulatory compliance at the American Bankers Association, said in a statement.

Even CSFI senior vice president John Thompson, an advocate for the fintech startups in the Financial Solutions Lab, questioned some aspects of the bureau's approach. "I was hoping to see more aspiration in the rule: What’s the structure for a new way to approach this problem?" he said, after attending the Kansas City hearing. Instead, the proposal is structured around closing a long list of loopholes.


As Feds Crack Down On Payday Lenders, Fintech Startups See An Opportunity

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Fresh Air had an approx 30 minute, very interesting and informative interview about "unbanking" services like payday lenders and check cashing operations. It completely undercuts LWT's "expose"-- and explained why the services are so popular. The interviewee was herself surprised by some of what she found, and I think her perspective is well worth considering: http://www.npr.org/2017/01/10/509126878/what-is-driving-the-unbanking-of-america

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