Could it be the cash advance lenders online who are preventing the local economies from gaining strength financially? I read a report today which professes that these sort-term loans are the reason communities are not bouncing back as fast as they should. This article also reported that the industry is shrinking nationwide and that state regulations are working.
I read through the article in hopes to gain some insight as to how one industry can be the blame for the economic problems through cities and towns nationwide. I also wanted to understand how the industry which has proven gains over the years is shrinking? It’s always good to hope to find clarity.
How can it be only cash advance lenders be on the attack?
Not only did I not find any clarity within the article, I couldn’t find any supporting evidence to blame one industry for the demise of city improvement efforts.
The industry is being blamed for taking the excess money away from residents in terms of interest payments. Instead of money being spent towards legitimate local businesses and improving the town, people’s money is being used to repay interest. I have some clear problems with this notion that one industry can be to blame.
- First off, I would have liked to have seen proof as to the percentage of residents who have applied to cash advance lenders in a given failing community.
- Secondly, I would like to know where they got the idea that the short-term loan industry is shrinking. Loans continue to be applied for and approved on a daily bases as the industry grows with new lenders.
- I would then like to know where the money being spent on interest would go instead? Would people who are in debt use this amount to buy at a local establishment or would it be used to pay down the other debt? If shopping local was not already a personal practice, the money would end up going someplace else.
- I would finally enjoy hearing how state regulations are helping to minimize fast cash advance lenders when there are new ones pooping up within the regulated industry. People are putting money into building these companies for a reason I am willing to bet that the reason has nothing to do with losing money.
In my own opinion, this article is one more opportunity to slam the short-term loan industry. There is no mention about credit cards having raised their interest to meet and sometimes beat those of direct lenders. There is also no mention about banks that have joined in to offer short-term loans without any form of regulation. Can we blame the direct lender for offering no credit bureau check options when everyone else is rejecting loan applications?
There needs to be less finger pointing and more education. People need to understand what options are in front of them and why others may not work. Knowing how to budget money, spend wisely, pay down debt and save are skills to be learned. Who says that a resident who has an extra $50 to spend will do it locally? It seems like a tall order of accusations are being made at the expense of the high interest loan industry. Take the bulk of the blame off of the cash advance lenders online and focus the energy to more positive solutions.
