Why aren't Payday loan stores illegal?

Question

If I had $100,000, could I write up contracts and open my own payday loan store?

Who is in charge of these stores?

I'm questioning this because they are taking in millions of dollars every year and are taking advantage of the poor and uneducated people.

Answer 1

We have a society based upon rampant consumerism and structured tiers of debtors.  Wherever the

hypothetical cutoff is for legitimate creditors to remain profitable is the same point where creditors operating beyond that cutoff will have to employ less-than-ideal practices to remain profitable.

The payday loan stores and their ilk provide a service to a "neglected" segment of the population...neglected in the sense of those excluded from consideration by legitimate lenders.

It is not profitable for large banks to loan money to the poor and uneducated. Thus, the choice is either to exclude these people entirely from the credit/debt system or allow payday lenders to operate in that sphere.

The fact that they find loopholes in laws just means they need to be regulated much better, not necessarily that they need to be eliminated altogether.

State legislators need to draft better, more comprehensive laws and the executive arm of the state needs to investigate the worst crooks and put some fear in the rest. One high profile, heavy duty fine/jail sentence should straighten a lot of these guys out.

Answer 2

Most states regulate these, my state has recently shut down several chains of them for unfair practices. The problem is that people (feel they) need them. So, just like tobacco and liquor, it is impossible to get rid of them. If you try to outlaw them, the people will just go underground and there will be no regulation at all. I wish there was a better solution (like educating people to know better), but I don't see one forthcoming.

Answer 3

that's whey they do it and know that's the only way they can get money. rent a center does the same thing they pay a fortune by the time its paid off and yes its legal title max is the same

here's one guy that owns a lot of them

http://www.debtconsolidationcare.com/pay...

Answer 4

Payday loan stores are a hot mess, but they are a place of last resort for those who need cash fast, but lack adequate access to credit.

Payday loan stores are a clearinghouse for the extremely desperate and the extremely greedy capitalist.  It is a marketplace -- nothing more, nothing less.

I honestly believe that the average poor person who goes to a payday loan store already knows he is in trouble by the time he enters the place.  

I think the average poor person knows he is in trouble when he signs the legal documents.  But he pushes his reservations aside because his need for cash outweighs the need for financial prudence.

I don't think the payday loan stores need regulation.  I think the poor people need educational courses to learn how to handle money and how to engage in behavioral decisions that simplify their financial life.

Furthermore, I think they need these courses to learn how to say "h**l no" to places like payday loan stores, predatory lenders, and spurious used car dealerships.

Answer 5

They actually outlawed them in North Carolina, but they found a loophole in the law.

Answer 6

they are there to provide a service.if you don't want to go there you don't have to.it's like any other place.if i had 100,000. i would invest it in other things. and no idon't know who is in charge.

Answer 7

They are illegal in my state. PA, we dont like shady, predatory lenders here.