The Daily Signal: Why Is the Hollywood Elite Trying to Deny Others What They Have?

 

Why Is the Hollywood Elite Trying to Deny Others What They Have?

Norbert Michel

August 18, 2014

The Daily Signal

Consumer advocacy groups have long painted the payday loan industry – companies that provide extremely short-term credit – as evil and predatory. Now, the federal government has joined in.

Operation Choke Point, which involves government regulators informing banks certain businesses are “high risk,” and the Consumer Financial Protection Bureau (CFPB) exemplify the federal crusade against the payday lending industry. Ignore the fact that government itself promotes numerous programs aimed at helping “low-income” and “underserved” people take out long-term mortgages.

The demonization campaign against short-term debt seems to be picking up momentum. Unfortunately, it looks as though nobody cares that these efforts could hurt the people using  short-term consumer credit services to help themselves.

Last week, Yahoo! Finance ran a story titled “The reign of payday lenders may soon be over.” The article recounts how the advocacy group National People’s Action’s advertisements during the Discovery Chanel’s Shark Week painted the payday loan industry as a bunch of vicious predators. Celebrities John Oliver and Sarah Sliverman joined forces and begged people to “literally do anything else” but take out payday loans.

What, exactly, qualifies Oliver and Silverman, who are both comedians, to give financial advice to people? Nothing.

Of course, Oliver had no problem making fun of TV host Montel Williams as unqualified to hand out financial advice. (Williams participated in a commercial promoting a lending company).

Regardless, the basic problem here is the complete failure to acknowledge that people may actually find these payday loans useful.

The Yahoo! article cites enormous growth in the payday loan industry, from “just over $1.5 billion in 2006 to more than $4 billion in 2013.” But it completely discounts the possibility that this industry grew so much because it provided a useful service, one that is, on balance, beneficial to both customer and business owner. Sometimes, people may consider it worth it to have money they need now – even if they have to pay for it.

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