Fat Tony and the Nobel Peace Prize

There is a movement afoot in our state to put limits on the interest rates charged by payday lenders. I think the entire industry is unsavory. I also think that regulations are not needed.

People fall into the trap of being stuck with these loans every payday and cannot get out. These people are fools and need protection. But will it help? I've often heard the quote, "you can't fool an honest man". You can draw your own conclusions about what type of people I think are getting trapped in these schemes.

Back in the day, Fat Tony would make you a loan for a week and you'd him back an extra 10% in two weeks. Of course, Check City won't send their goons out to break you legs when you don't pay. They have to go to court. Nobody dared rob Fat Tony, because they'd end up dead. Check City needs the glass, the safes, the security etc. and all that stuff costs money. The cost of providing this microcredit is large, hence the large interest rates.

I'd like to see these payday lenders, as they exist now, all go out of business. HOWEVER, the need for rapid microcredit is very real, very large, and ignored. Let's assume that my furnace went out today. Say that I'd need $500 bucks to fix it. I could cover it with checking. If not, I could use my credit card. Not everyone can do that though. I think credit cards are foolish. I keep one with a 500 dollar line for making online hotel reservations, car rentals, etc. that I won't use my debit card on for security purposes. I could go the bank tomorrow and fill out the paperwork. And in a few days I'd have my answer. It's only because I have a job, a home, and a decent credit score. What about everyone else.

We need to find ways for the Regular Joes to get access to small loans. One suggestion is to pretty much make these types of loans to women. Women don't squander money like men do. When they say I want to borrow 500 dollars for a used sewing machine and start-up supplies they will use it for that purpose. Another example could be $1200 for a greenhouse and some drip irrigation equipment to grow organic vegetables. This is the type of stuff that is being done routinely in some countries in an effort to ease poverty. I think it can be done here. Microindsutries are viable, expecially in agricultural products.