A still-bad idea on payday lending

February 21, 2013 

The advocates of payday lending say the virtues of the industry include providing a sort of credit to people who can’t get it otherwise, against their future paychecks. The industry, they say, offers a convenience, a service to people who need it.

But that service, before North Carolina Attorney General Roy Cooper and lawmakers ran payday lending operators out of the state more than a decade ago, came at a high-interest price and borrowers often found themselves on a treadmill, trying to pay off one loan with the next, and so on. It was bad business.

And it still is. But state Sens. Jerry Tillman of Archdale, Tom Apodaca of Hendersonville and Clark Jenkins of Tarboro are perfectly happy to offer this unsavory industry another crack at North Carolina consumers. They’re the sponsors of a bill to bring back payday lending. It would allow postdated checks with fees as high as 15 percent. The lenders have another pal: former House Speaker Harold Brubaker, now a lobbyist for the industry.

Cooper is quick and clean on the subject. “This,” he said, “is the same old rip-off we ran out of our state years ago. These overpriced loans trap borrowers in a cycle of debt many cannot escape. Payday lending was a bad idea then and it’s a bad idea now.”

Yes, and yes. It may be true that the state can’t protect all consumers from their own bad judgment, but this is an industry that encourages bad judgment for its own profits. And it does so with people who can ill afford to run up debt of any kind.

Lawmakers ought to be safeguarding consumers, not blatantly helping an industry exploit them.

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