Payday Loans Forced To Pay Into Education Fund

Posted on | May 16, 2011 | 9 Comments

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In 2009, the governor of Delaware and the legislature created a new state law which required high-interest loan businesses to pay a $1,500 annual fee per office, with the fund earmarked for public financial education.  Because of the fund, that state has awarded $500,000 in financial literacy grants to 13 nonprofit organizations.

Gov. Jack Markell said the 13 programs, by nonprofit groups statewide, can change lives.

“These organizations help people make the most of the money they have and, through education, help people avoid financial predators,” he said in a statement. “Financial literacy helps people open a new chapter in their lives — one dedicated to economic opportunity and empowerment.

“In difficult financial times, these skills are even more important,” he said. “It is also vital that we educate our young people so that they grow into adulthood already equipped with good financial habits.”

Could something like this work in Texas? Or, a better question would be should we implement something like this in Texas?   While it is definitely a good idea to educate Texans so that they are more financially savvy, taxing payday lenders and other predatory lenders is not enough. We need to focus our attention on eliminating these types of businesses completely.  Many of these payday lenders are engaged in predatory lending practices which prey on people’s vulnerability, not just their ignorance.  This is why you have some instances where well educated but financially struggling individuals take out payday loans.  They are simply desperate.  For Texas, a better solution would be to create laws which minimize and eventually eliminate the negative impact payday loan lenders have on our community.

And now you know,

PH

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Comments

9 Responses to “Payday Loans Forced To Pay Into Education Fund”

  1. Payday Loans Forced To Pay Into Education Fund : | visacredit.co
    May 17th, 2011 @ 3:22 am

    […] Read the original: Payday Loans Forced To Pay Into Education Fund : […]

  2. Loans
    May 17th, 2011 @ 3:41 pm

     Payday loans can help people to save money and to have a good financial habits as well. 

  3. Paralegal
    May 17th, 2011 @ 4:13 pm

    Ha! Ha! Awesome spam response!

  4. Fort Worth 8L
    May 17th, 2011 @ 5:35 pm

    Duuuuuuude, how does charging somewhere in the neighborhood of 250% interest help anyone other than the scumbag “lender” to save money?  Please take your baldfaced lies elsewhere. 

  5. Paralegal
    May 17th, 2011 @ 10:06 pm

    Best spam post EVER!!!

  6. Realestdudeintheroom
    May 19th, 2011 @ 5:49 pm

    I don’t think I’ve ever seen a spam post that made sense.   

  7. Superlegal
    May 25th, 2011 @ 3:03 pm

    Oh, I had NO idea. I will run out and get a payday loan ASAP! I need to save some more money and anyone could benefit from better financial habits. I will, however, look elsewhere for grammatical advice.

  8. Fort Worth 8L
    May 17th, 2011 @ 5:40 pm

    PH, if Texas enacted such a tax on the payday lenders, Guvner Hairball’s campaign contributions from that sector would dry up.  He’d be crushed. 

    When I was growing up, usury laws had a specific interest rate ceiling over which was presumptively usury.  In the 1970’s (I think), that was changed to reviewing the lending “process” to “ensure” that the interest rate charged reflected the risk in making the loan.  In other words, just as with so much of the regulation intended to protect the relatively powerless consumer, any checks to keep predatory lending in balance was gutted, made toothless and set up only for show.  We need to stop the knee jerk reaction to regulation as if we are saying murder and start realistically reining in the extremely powerful oligarchies of banking and oil (for starters).  

  9. Paralegal
    May 17th, 2011 @ 7:51 pm

    Good points! And you get extra bonus points cracking me up with our Governor’s nickname.
    Awesome :)

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