Payday Loans pt3

On this episode of MorningLine, Nick Beres is joined by Marla Williams from the Legal Aid Society to discuss payday loans.

Are back with marla williams she is with legal aid interesting topic one that i think a lot of people may be aware of maybe have taken advantage of once in a while tried it realized well it worked for me or maybe it didn’t payday loans flexible credit and the like and she works with clients dealing with falling into some of the massive debt that can come out of all

This i understand people desperate for money but as she said i mean if you’re that desperate you have no other option a credit card is a better option because the interest rates aren’t quite as big you just don’t want to go into debt if you could some people have no choice though they just have no choice we’ve got a few callers here that waited through the break

Lynn good morning hi lynn good morning good morning um i just have a few thoughts on this i have never had to use this thank god but i blame the useless state legislature for not uh increasing the minimum wage for the working poor for not expanding medicaid so these these people who are living paycheck to paycheck you have a you have a medical emergency or your

Children need shoes or you have to pay the electric bill or they’re going to turn your your electricity off what are they supposed to do and can can this useless state legislature not put a cap on the interest rate that these people have to pay i understand these are legal companies but their ads are so misleading i got my title back with title max and they show

These people dancing with joy showing their car title what they don’t say is on a 200 loan for your for your car title what are they paying back probably well over a thousand dollars on a two hundred dollar loan i think it’s unconscionable that these people sit in the state legislature and twiddle their thumbs and do nothing for the working poor of this state those

Are my only comments on that but thank you for listening sure lynn thank you she really hit on two points there um the first one we’ll get to in a moment the second one with regard to um interest rates and the state we’ve already established that uh you know in 2015 and others the state lawmakers you know um i think in part because look they’re being heavily lobbied

By a very financially rich group here that runs these things and who are we kidding that makes the difference they don’t really regulate the interest rates or they can but they don’t limit them do they they don’t put a cap well there’s a cat okay i mean a reasonable very high thank you okay okay you’re right so they can say they can argue well sure there’s a cap

On this okay we’re captain but the cap is absurdly high right all right and the other point that she makes is a larger picture i mean i think it’s pretty clear that these types of businesses are going nowhere they’re going to be here and people will continue to use them um the best way to get people not to use them is to find a way for them to make a living and not

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Need to take out these loans right it’s not the big picture i agree with that but i think the education too like you know i hope people are watching today to hear about this and also our our firm tries to communicate communicate to folks through community education just to let them know what they’re getting into so then they’ll make an informed choice whether they

Want to borrow money from one of these entities if you know because often we hear that you know like everybody says i didn’t know what i was getting into yeah i’m just guessing that most of these individuals going for these loans are not thinking first i’m going to call legal aid and run this by them i mean that’s just not that’s probably never happened okay so

You’re usually seeing them after the fact right right after the fact but maybe people are watching who know of friends or loved ones or thinking themselves and this will give them pause now either way you’re going to pay quite a bit on this now i understand if you have lousy credit okay for whatever you did earlier in your life when you take out a loan somewhere

You’re going to be asked to pay back more interest because there’s higher risk to the borrower or the lender that’s reasonable right so the issue here with these establishments is if you take out the loan you’re going to be paying more if you can pay it back within that window you’re paying more it’s exorbitant but hey you’ve got bad credit so you’re gonna have

To pay more sorry that’s the way it works the real trouble comes when you miss making that first payment yes yes well the real the real the real trouble yes comes when you because it really builds up right right and you roll over um and you know but with the like the flex loans i mean the point seven percent customary fee and that’s what i want to emphasize

With flex loans the law allows a 24 interest and the statute makes the distinction that um not to confuse interests with the fees so the fees are 0.7 percent and that’s where the the problem comes there i mean it’s crazy that they differentiate that because they split it i mean it’s basically you’re paying whatever it is that you’re paying back because you’re

You know the fee that they get or interest it’s all the same all goes into the annual percentage rate computation but um so um but with the flex loans by the way why is it called flex oh good good question um it’s called flex because it’s an open line of credit so that’s one of the attractions is nick i’ll extend you credit of four thousand dollars um and you

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Don’t have to take it all but we will be here for you should you need more so you could take you know a hundred dollars two hundred dollars and but you know you’ve got an open line of credit up to some people qualify for up to four thousand it’s very tempting isn’t it yes that’s what it is you maybe go to them and you’re like i just need 200 for this weekend and

They say well we’ll open up a line of credit for you up to four thousand dollars you’ll have that in your pocket if you need it and then but really all they needed really was 200 but maybe they’re like wow well sure you’re gonna loan me that i’ll do it before you know it they’ve spent that right that’s very clever you know exactly what’s going on there well let

Me just say also in some of the cases that we’ve handled in the state courts we do you know discovery like ask the company for records and we see that um their activity that they record is that they’re calling up these people who have flex loans flex loans who have an open more money that they can borrow and just say hey nick you’ve got you know you only got

Two hundred dollars that you borrowed and you got four you want to come in and get some more money yeah so i remember look and you wonder who falls for this kind of crap but it’s like i remember with credit card companies there would be times sometimes i’d get with my statement attached to it checks for the nick you can sign this check and put it in your bank

Right now for five thousand dollars i’m looking at this check and i’m like wow and then you realize what this credit it’s just like no you tear it up or whatever i mean it’s tempting and that that’s right there they’re trying to goad you into borrowing more right more than beyond what brought you there in the first place again folks you see exactly what’s going

On here and yet it’s legal and yet it does work because thousands of people do this every day because the people running these businesses are almost wealthy beyond belief let’s go next to sue ellen hello sue ellen uh hey y’all i’ve got a couple of comments and i have had experience with this and it was a title loan nearly 20 years ago but first i want to comment

In the late 70s i took out a 90-day loan through the bank for 300. i had to have a co-signer i had credit at the time but this was the way to help build up my credit too and i didn’t need the money and it was that market rate and i paid it off and they weren’t going to give me any more money during that time any loans until i paid off this loan and there was no

Guarantee that i could get another 90-day loan behind that without a co-signer because it was just too dang early to know what my credit score might be and this did add to my credit score but the other thing is when people say comparing these people to loan sharks is not really quite right i beg to differ because i remember loan sharks and if you didn’t pay a loan

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Shark their money back you did they didn’t get their money back when they wanted it they made sure that you didn’t make money so they broke your hands broke your feet broke your legs and made it where you could not work and you would pay you would end up on the streets broken homeless so what’s the difference you know the lady just sit there and talk about payday

Loans and how they could swipe their whole social security uh uh payment off and stuff like that so my experience 20 years ago about roughly 20 years ago was on the title loan through kids who had three kids before they were 20 years old and people were trying to help them initially when before that first child was born and somebody had gave them a van and this

Was a luxury van that somebody that had means just gave it to him when they went to the title of people the blue book alone on this van was fifteen thousand dollars they got a three hundred dollar loan a year later they were still not able to pay that three hundred dollars and when i approached them the deal that i set up was i’m gonna go down there and pay off

Whatever monthly fees it’s going to be this month the interest rate was right around 298 so they were paying like 100 and something dollars a month on the fees and interest every month and i sat there and put a lien on their vehicle took the keys in the title and it took them another year to pay me the 300 back but in the meanwhile they had paid around fifteen

Hundred dollars on a three hundred dollar alone okay her points made um and well the difference between this and loan sharking the traditional thing that you think about one they’re not going to come break your thumbs it’s regulated there’s none of that but i see her point that they can do what they can do under the law to garnish your wages make sure that you

Can’t take your paycheck home with you because you owe them and they get in line first and get the money right right i mean what she described young kids with children desperate in this and and that’s how on a 300 loan they can end up losing a very expensive van right right that’s how it goes right let’s see what rick let’s see we want to take a break real quick

Okay we’ll take a break when we come back we’ve got rick and others popular person we’ll take more calls right after this

Transcribed from video
Payday Loans pt3 By NewsChannel 5