Letter: Payday Lenders are Loan Sharks
Steven V. Martino writes that payday loans target low-income people, worsening their financial situation.
Rather than devise some catchy hook for the opening of my letter, I've decided to just say it how it is: Payday lending is bad.
Now, let me explain. Payday lenders set up shop in some of our state's poorest communities. We see them in Pawtucket, Woonsocket, Providence, Cranston and even Warren. They attract folks who have no money, no savings and, often times, little-to-no credit. Financially strapped customers borrow an amount they must pay back in two to four weeks, and then they borrow and re-borrow that same amount for years. That is how this ridiculous industry makes millions off the backs of decent, hard working Rhode Islanders.
Payday lenders also claim they provide a valuable credit option to folks who, otherwise, would have no access to credit. But the truth is, Rhode Islanders would be better off without it. In fact, these "loans" aren't even real loans. Simply put, payday lending is nothing more than legalized loan sharking.
Payday lenders also go to great lengths to restrict repayment plan options, which can help break the payday loan debt cycle consumers so often find themselves in. And, they even claim they're bogus product is better than other unfriendly credit options, like bank overdrafts and late fees.
So, to recap...payday loans are bad.
- Steven V. Martino