Eliminating options
The Virginia-Pilot
April 12, 2009
by: Tim Miller
Terry McAuliffe's plan to shut down the payday loan industry would eliminate short-term loan options for many Virginians. It would ignore the increasing number of constituents and hardworking consumers who are struggling to gain access to credit in today's economy.
Contrary to McAuliffe's claims, a Dartmouth College study found that a 2007 ban on payday lending in Oregon hurt borrowers, forcing them to turn to more expensive alternatives, such as bounced checks, overdrafts and credit card cash advances.
A New York Times Magazine article last year noted that payday loans are a valuable financial tool, offering easy-to-understand conditions with "no surprises, no hidden fees," unlike many banks, which are not demonized by elitist politicians.
Shutting down the short-term payday loan industry only forces these borrowers to resort to less desirable alternatives to make ends meet.
Tim Miller
Center for Consumer Freedom Washington, D.C.
