Monday, December 3, 2007

Local cash loan stores borrowing trouble

Summit County had three of them in 1996. Now we have 65.

That's according to a councilwoman from Cuyahoga Falls who Monday night led fellow elected leaders to consider aggressive legislation to limit the number of cash loan stores within the community (no more than one per 10,000 residents) and the proximity of stores to one another (1,000 feet minimum).

She also went eye-to-eye with a man who owns two cash loans stores and who wants to make sure he and other business owners can still offer quick cash within the city limits.

He argued that the stores wouldn't exist unless people had a need for them.

I think he's half right.

People have a need alright. They have a need to make enough money to pay the monthly bills so that they don't have to borrom cash on from a legal loan shark in order to make ends meet until the first of the month.

What they don't need is someone dangling a carrot in front of their noses when they're bellies are grumbling. At least, not a carrot that has strings attached. A $15 fee on a $100 loan that must be paid back in two weeks is a ridiculous interest rate. Ridiculous.

Yes, some of the folks who take these loans put themselves in a bad position because they make bad financial decisions. They have no one but themselves to blame. Maybe that's all the more reason not to put a weapon in place that allows them to turn a self-inflicted wound into financial suicide.

Last spring, I interviewed a man on North Hill who took one loan .. and then another to pay off the first .. and so on and so on to the point that collection agencies were calling and threatening to take away his home.

He told me that he'd have been better off learning his lesson by having to scrape to get by when he overspent for the month than to have the enticement of a quick bailout. The more I think about it, the more I think he's right.

I hate that I see so many of these shops around town. I hate it. I hate what they represent: an enticement to feed the bad habit of poor money management that to some is as addicting as drugs.

While yes, some folks will think smartly and only use the quick cash loans as a last resort, most see only the cheese on the plate .. and now the mouse trap waiting to come crashing down on their heads.


Village Green said...

Great rant! I agree with you one hundred percent. These stores are everywhere and nobody seems to question why the rich grow richer why the poor have to settle for ever increasing debt.

Tim Lones said...

I have firsthand knowledge of getting in that trap..My wife was in an auto accident a few years ago. It took $230.00 to repair the damage which we had to borrow from a "quick loan" place..Starting a two-year spiral where I was paying up to $500.00 every two weeks to one company..Then borrowing from another to try to pay our bills. The interest about did us in for awhile. Finally I used my income tax refund to pay it all off..Ive used quick loan a couple times since for small ($50-100) loans, but thankfully we're out of that trap. It still hasnt been easy, but I feel better for every pay period where I dont have to go t these "legal loan-sharks"