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If you read the article, there's a little more nuänce than that. One thing listed right up front is a limit on how many times a lender can try to withdraw funds

If you read the article, there's a little more nuänce than that. One thing listed right up front is a limit on how many times a lender can try to withdraw funds from your account. If they have, say, a $200 NSF charge, and your payment bounces, they can try every business day, racking up $1,000 a week in NSF fees. Companies that do this kind of thing aren't trying to collect their original payments in good faith, they're trying to suck every last droplet of blood from those lenders who have a temporary problem but then get some money. Limiting attempts to two would stop that.

i_am_proteus 8y ago
Nonetheless, payday lenders are not exactly making money hand over fist. Predatory practices to recover as much money as possible are, in aggregate, a reflection on the risk profile (i.e. staggering default rate) of these borrowers. Prohibiting these practices with no replacement measures just raises the rate or reduces loan availability. Realistically, people who can't get even a (legal) payday loan often turn to places where someone breaks your legs when you don't repay.
- scottlocklin 8y ago
  Erm, do you have evidence that payday lenders are not making money hand over fist? This is a large statement with no evidence. I'm assuming they're quite profitable and low risk, for the same reason I assume fast food is; you see them everywhere there are poor people. Making usury illegal has no downsides.
  - nopriorarrests 8y ago
    Some big lending companies issue bonds to finance their operations. And, ironically enough, these bonds are _high yield_, meaning market does not trust that these companies are making money hand over fist. Any negative macroeconomic shock (like recession) can easily raise average loan default rate 2-3x and sink payday lender business in a single quarter. Such is life.
- CydeWeys 8y ago
  > Nonetheless, payday lenders are not exactly making money hand over fist. Even assuming this is true, which I doubt, am I supposed to care that predatory lenders are suffering? It'd be good if they shut down. I'm all for making them unprofitable.
- Someone1234 8y ago
  > Nonetheless, payday lenders are not exactly making money hand over fist. Before these regulations were originally enacted they were making $9.2B, that dropped to $6B. The regulations are now being removed. So they were in fact making money hand over fist, and will be again.

i_am_proteus 8y ago

Nonetheless, payday lenders are not exactly making money hand over fist. Predatory practices to recover as much money as possible are, in aggregate, a reflection on the risk profile (i.e. staggering default rate) of these borrowers. Prohibiting these practices with no replacement measures just raises the rate or reduces loan availability. Realistically, people who can't get even a (legal) payday loan often turn to places where someone breaks your legs when you don't repay.

scottlocklin 8y ago
Erm, do you have evidence that payday lenders are not making money hand over fist? This is a large statement with no evidence. I'm assuming they're quite profitable and low risk, for the same reason I assume fast food is; you see them everywhere there are poor people. Making usury illegal has no downsides.
- nopriorarrests 8y ago
  Some big lending companies issue bonds to finance their operations. And, ironically enough, these bonds are _high yield_, meaning market does not trust that these companies are making money hand over fist. Any negative macroeconomic shock (like recession) can easily raise average loan default rate 2-3x and sink payday lender business in a single quarter. Such is life.
CydeWeys 8y ago
> Nonetheless, payday lenders are not exactly making money hand over fist. Even assuming this is true, which I doubt, am I supposed to care that predatory lenders are suffering? It'd be good if they shut down. I'm all for making them unprofitable.
Someone1234 8y ago
> Nonetheless, payday lenders are not exactly making money hand over fist. Before these regulations were originally enacted they were making $9.2B, that dropped to $6B. The regulations are now being removed. So they were in fact making money hand over fist, and will be again.