You mean to say they get it wrong, according to your view, since we've just agreed there's no objective right and wrong in these matters.
This is not correct at all. They do not have a paycheck. They have a borrower's personal check that is usually postdated. The typical charge off rate for these loans are 25% with the majority of the loans typically only a couple of hundred of dollars. The CEO of a payday lender was quoted as saying that they don't take any of these claims to court because its not worth their time. I would definitely say the rates they are charging to the type of people they are lending too is inline with the amount of risk they are taking.
What do you mean by "the type of people they are lending to"? Many of the navy guys here use these loans. Are you saying that our army/navy boys are not very responsible?
I think beyond the risk pricing you also have to consider that the lenders fixed costs are built into the interest rate on each loan. With payday loans the loan size is small and term is short, so a moderate dollar amount turns into a large %. I agree that it sucks to be in a position to need to borrow this way, but I don't think payday lenders are getting rich. I bet if you make a spreadsheet with some ballpark numbers (rent the store, pay 5 employees, $300 dollar loans for 2 weeks, etc.) you would find this is not a viable business at "reasonable" interest rates. If it were I think competition would drive the rates down. I don't believe this in general but this is not a business that is that hard to get into.
Hahaha, good one... Ciao, amico. Sadly, you (like others) are too fickle and temperamental to have a discussion with.
Hippie means the payday loan company knows the borrower has a job. So, the borrower will receive their paycheck in time and will be in a position to pay out the loan.
why can't the states print their own money. if you want a free market states should be free to use their own money. this seems like a strong arm monopoly.