Audio Clips

18 November 2010

In Defense of Pay-Day Lending

Look, the reality is that there is significant risk to the lender in making these loans. That risk HAS to be offset by higher costs to the loan recipient. There are certain fixed costs of running a business that these pay-day lenders can't get around and if they were charging 6% interest on $300 loans they would go out of business and that doesn't serve the people who need their services. No one is being forced into a contract with a gun to their head here. The government shouldn't be involved in dictating terms of contracts. The government's role is to enforce contract law, not dictate the terms.

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