User-Whee!

The state legislature has finally lanced a pustule on the ass of the Oregon body politic. By a vote of 18 to 11, the state senate voted to cap interest rates on consumer loans at 36 percent. The bill goes into effect July 1st.

I sure wish I could make 36 percent on anything, but for a decade now, Oregon’s payday loan sharks have been charging—but wait, you really have to take a guess on this.

How much do payday loan businesses need to charge to be able to stay in business: 100 percent? 200 percent? 300 percent?

Mais, non! Payday loan sharks need to charge 500 percent(!) interest just to stay in business. At 500 percent, they seem to be just getting by, which is why we now have more payday loan shops in Oregon than McDonalds.

A typical loan is about $300 and is made to a poor person who also happens to be stupid. They would use the money for discretionary items such as food and rent or to fix their car so they could get to work at their minimum wage job.

Some of them were Oregon lottery addicts, so in a way the PD loan industry was subsidizing state government, and I guess my pension, for that matter. Thanks!

Thing is, the loan would be due in a few weeks, and since Citizen Stupid doesn't have any more money now than he did then, he would pay a big fee to roll it over for another few weeks.

Where’d he get the money for the big fee? Why, right next door at another PD loan shop! You can see how poor money management skills, crap jobs, and a low IQ could combine to produce what people in the PD loan industry refer to as “clients.”

This has been an issue in Oregon for several years now as the newspapers have picked up on how the scam works and how many families and individuals it has forced into bankruptcy. It all started in the late 90s when the legislature lifted the cap on legal interest rates to adjust to the quickly rising loan rates. Instead of adjusting the usury definition upward, though, they just eliminated it.

Within minutes, signs went out on shop fronts, and loan sharks who used to work from street corners got to move indoors.

This detestable practice was allowed to continue for a decade because the sharks quickly formed a professional association and started lobbying and because Oregon Republicans have become so ideology-driven they don’t know a turd from a truffle anymore. “Let the market work,” one of them said in arguing against the new bill. There would also be a market for contract murder if we legalized it, but fortunately, that one hasn’t come up this session. No question it would have Republican support.

“Industry” spokesperson Steven Hanson said “These politicians don’t care about the small Oregon business owners who are going to be on the street. They ought to care about the consumers.”

Poor babies!

Don’t let the door hit you in the ass on the way out.