Payday Loan Times

Barbara Evans is director of Alabama Watch. She recently wrote in to the Montgomery Adviser …

I applaud the Montgomery Advertiser for its series on payday loans, and I have reviewed the letter from Darrin Andersen, president of the Community Financial Services Association of Alexandria, Va., stating that consumers have the smarts to make the correct choices for their lives.

Consumers may have the smarts, but the state of the economy and job conditions make it difficult to make the correct choices.

In this materialistic society, where a person’s worth seems to be measured by their credit rating or their possessions, working class families find themselves working two and three jobs to survive, and relying on payday advance lenders to get them out of the seemingly never-ending crises that occur in their lives.

I am reminded of many years ago, when I was forced to go on welfare. On Christmas, there was no money for toys, and I was desperate to get my son a Big Wheel. I would have done anything to get that toy for him. I ended up not paying my rent to get the toy, and we later got evicted. It was a stupid choice to everyone but a single mother.

Alabama Watch believes that a small loan is a small loan, no matter what kind of loan it is, and that small personal loans ought to be regulated by the Alabama Small Loan Act. It isn’t fair to consumers or other lenders to carve out special laws for special lenders, and it is disingenuous to consumers to do so.

We don’t have the lobbying strength of the well-financed quick payday loan lenders. We are also weakened by the fact that families in crisis with poor credit have nowhere else to turn. The payday lenders have a strong argument when they compare their rates to the bank overdraft charges, which are now approaching $40.

We are accosted by a constant barrage of credit card offers in the mail. I get about 15 per week. Homeowners are a marketing target for equity lenders. It sounds great to combine car loans, credit cards and other debts into a new mortgage, but it causes some people to lose their homes.

Marketing of cash loans, equity loans and credit cards is a huge business, and they know how to get to people who are looking for a way out of a bad situation. It is unfair to blame consumers when we are targeted by big business and when most of us are at the wall financially.

Alabama Watch provides preventative education to consumers on a number of issues such as payday cash advances, but our bottom line lies in our legislative and court systems.

Until we have a fair and nonpartisan way to elect judges, until the guy with the most money stops winning elections, until we stop selling our democracy for money and power, we will be at a terrible disadvantage.

The only home is for consumers to organize, become well educated and band together to force change. We hope we can continue to be a part of that change.