Financial Information Service

Washington - Fed up with politicians incapable of balancing budgets? Well, now state legislatures across the country want to take a crack at balancing your checkbook – whether you like it or not.

Paternalism – the idea that government must take care of adults because they aren’t able to do so themselves – is the ideology behind the wave of politicians determined to limit how much and how often Americans can borrow money. By putting stringent restrictions on borrowing, these politicians would effectively ban the practice of short-term “payday” lending, no matter how many people use it responsibly in times of crisis.

For those who enjoy access to high lines of credit, these short-term loans – which essentially let customers borrow cash from their next paycheck – may be a bad deal. But many of the less prosperous don’t have such attractive alternatives to the kind of loans that politicians like to demonize.

So when Democratic presidential candidates Barack Obama and Hillary Rodham Clinton prey on people’s emotions by calling payday loan lending “abusive” and “predatory,” the result of their actions will be leaving low-income borrowers stranded in debt.

Most financial institutions aren’t willing to cover the risk that these loans incur, so real alternatives don’t exist. Why is that the case? Consider this scenario.  More>>

WE NEED PAYDAY LOANS?

In the developing world, people are blindly turning to payday loans. This is a relatively new concept brought to them by people who have been exposed to payday loans in developed countries. Consider someone who sees an advertisement in the newspaper for payday loans, but when you get there, the dealer is asking that you surrender your car registration or your land deed, just until you payback the money.