Struggling with payday loans
In 2001 the North Carolina General Assembly went out of its way to outlaw the payday lending industry in the state.
On Wednesday, Crystal Feldman, a spokeswomen for N.C. Gov. Pat McCrory said that the governor has concerns regarding a Senate bill meant to bring back an industry that the state worked so hard to remove.
And we believe that his concerns are certainly valid.
The payday loan industry preys on desperate people living on a paycheck-to-paycheck basis by saddling them with excessive fees and interest rates on loans of low amount.
Now, the industry has hired a bevy of high-powered lobbyists and, with the support of two key Republican Senators, is attempting to gain approval for the return of payday lending in the state.
Under the scope of the bill, there would be a re-institution of a class of loans up to $500. According to a report Wednesday by the Associated Press, the lending institution can charge fees up to $75.
Industry advocates will say that there is a lack of options for people with poor credit to get instant cash.
But, even with tougher restrictions to protect borrowers, this is not the time to even think about permitting payday lending. In fact, we might go so far as to suggest that there is no good time to allow the institution.
McCrory has long stated that he objects to increasing the financial burden on families but that is exactly what payday lenders do. Small loan amounts with high fees have been known to be worse for those taking out the loans than traditional bank loans.
Need us remind McCrory and members of the General Assembly that the people are the state government’s “customers.” Remember the phrase “a government of the people, by the people and for the people.
A better suggestion would be to raise the state’s minimum wage so paychecks would stretch better between paydays thus eliminating the need for these seedy short-term loans.
That proposal would also help our businesses because people would have more money to spend.
All-in-all payday lending is a bad idea and McCrory as well as members of the General Assembly should bear in mind the damage that letting this kind of industry into North Carolina can do to its residents.
By Matthew Clark, for the Editorial Board
The Daily Courier Editorial Board consists of community members Jerry Brewer, Kyle Bingham, Tom Padgett, Dr. Shermaine Surratt and Cliff Strassenburg as well as Editor Matthew Clark.