With the focus on the economy and so many people facing budget issues, it stands to reason that the payday lending industry is going to be one that people turn to. While there has been a great deal of controversy over this at times, in my opinion, there is a simple logic to it. The reality is the ability to access a cash advance is a market that this industry fills. If it didn't? They would not exist. Those that have a less expensive option, take it.
When this was a hot topic in Ohio, I couldn't get past the fact that bouncing a ten dollar check could create more fees and net end result of a higher interest rate than a payday loan for several hundred dollars. It's easy to give people advice when it comes to money management, and there are clear horror stories out there about people who have not used the concept of a check advance the way it was intended. Or who have assumed this was free money and gone to more than one lender knowing that they had no real ability to repay it.
It's rather ironic to me that a whole industry is blamed for the few scenarios where the real blame would be more one of personal responsibility. If we truly do believe that this is a free market society, then while there does need to be certain protections in place, there should be the natural competition of the market place without bias towards or against one industry. Here in Ohio, it was the credit unions who stood to gain the most from limiting the amount of money a payday lender could charge. There was very little discussion as to what would happen to those who relied on the cash advance industry, just an assumption that by somehow trying to run these companies out of business it would magically make things better.
There have been times in the past when my family used a check advance because circumstances beyond our control made our budget go out the window. The trick is to only borrow what you know you can repay, that seems to me to be what the focus should be on. As the economy continues to impact us, I think it's a discussion that should be taking place...