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Instead of accepting the 'need' for usurious loans, we should resolve the underlying problem. Nobody should be in a financial situation where they 'need' one o

Instead of accepting the 'need' for usurious loans, we should resolve the underlying problem. Nobody should be in a financial situation where they 'need' one of these loans.

cylinder 10y ago
How do you ensure that? Even if you give people a basic income they can mismanage it and end up needing a loan.
- kevin_thibedeau 10y ago
  Start by forcing the banking system to offer minimal modern services for the poor without escalating fees for trifles.
  - AnthonyMouse 10y ago
    > Start by forcing the banking system to offer minimal modern services for the poor without escalating fees for trifles. In this case the problem isn't the banks. It's that given the choice between paying $10/month for banking service and "Free* Banking" with escalating fees for trifles, people pick the second one and the bank that offers the first one loses customers. But payday loan companies are lenders, not savings banks. The problem there isn't transaction fees, it's interest rates. And that isn't a problem you can solve unless you can somehow reduce the number of people who default on their loans. And most of the ways to do that are worse-than-the-disease solutions like restricting bankruptcy, garnishing wages, debtor's prison, etc.
  - lujim 10y ago
    That was a good podcast. It mentioned how when legislators took on payday lenders, the lenders just went out of business. There just isn't a reasonable way to provide low cost loans that have a high default rate. It's like trying to outlaw gravity to prevent plane crashes. You are free to open a low cost lending operation in a rough neighborhood, but you will go out of business in a matter of weeks.
home_boi 10y ago
Isn't that what insurance is for?
fiatmoney 10y ago
Nobody should ever "need" food. We should stop advertising potatoes.
- pessimizer 10y ago
  We should definitely stop advertising loans for potatoes at a 600% interest rate.
lujim 10y ago
Nobody should 'need' a hospital either. We should be able to prevent every disease and accident. The devil is in the details though.

Instead of accepting the 'need' for usurious loans, we should resolve the underlying problem. Nobody should be in a financial situation where they 'need' one of these loans.

cylinder 10y ago

How do you ensure that? Even if you give people a basic income they can mismanage it and end up needing a loan.

kevin_thibedeau 10y ago
Start by forcing the banking system to offer minimal modern services for the poor without escalating fees for trifles.
- AnthonyMouse 10y ago
  > Start by forcing the banking system to offer minimal modern services for the poor without escalating fees for trifles. In this case the problem isn't the banks. It's that given the choice between paying $10/month for banking service and "Free* Banking" with escalating fees for trifles, people pick the second one and the bank that offers the first one loses customers. But payday loan companies are lenders, not savings banks. The problem there isn't transaction fees, it's interest rates. And that isn't a problem you can solve unless you can somehow reduce the number of people who default on their loans. And most of the ways to do that are worse-than-the-disease solutions like restricting bankruptcy, garnishing wages, debtor's prison, etc.
- lujim 10y ago
  That was a good podcast. It mentioned how when legislators took on payday lenders, the lenders just went out of business. There just isn't a reasonable way to provide low cost loans that have a high default rate. It's like trying to outlaw gravity to prevent plane crashes. You are free to open a low cost lending operation in a rough neighborhood, but you will go out of business in a matter of weeks.

home_boi 10y ago

Isn't that what insurance is for?

fiatmoney 10y ago

Nobody should ever "need" food. We should stop advertising potatoes.

pessimizer 10y ago
We should definitely stop advertising loans for potatoes at a 600% interest rate.

lujim 10y ago

Nobody should 'need' a hospital either. We should be able to prevent every disease and accident. The devil is in the details though.