Flutterby™! : Evangelical Usury

Evangelical Usury

2008-02-17 22:38:42.620823+00 by Dan Lyke 5 comments

Study finds correlation between Evangelical Christianity and the location of "payday loan" operations. More over at consumerist's look at the study. Via.

[ related topics: Religion Sociology Economics ]

comments in ascending chronological order (reverse):

#Comment Re: made: 2008-02-17 23:59:08.905763+00 by: meuon [edit history]

Sigh, Yet another one of my customers is entering negotiations with a "payday loan" outfit from Cleveland TN, also headquarters of the Church of God. They think it's good business, it makes my skin crawl. Another of my customers has several of them for a client, they are a printing company. Something is wrong in the world when you print "door knockers" (things that hang on a doorknob, like Pizza delivery flyers) that are "Notices of Civil Lawsuit"... in the easy tear-off 100-pack with fill in the blank parts for amount, court time, etc..

The dirty secrets of the industry include:

How much those "loans" can really cost you. Fees, background checks, membership.. all add up.
How much money the local courts make processing the lawsuits, in bulk.
How much "legit business" feeds on the industry.
How much money the lawyers and the company make on "bad checks", or payday loans gone bad. The law says 3x the amount of the check, up to $500 in Tennessee as a civil matter, if "criminal" (think several of these, w/intent.. etc..) they can come after assets including vehicles, houses, etc..
How they bypass state laws with online "payday loans" by processing the transactional part of the online application on an off-shore webserver.
Said "off-shore" webserver is really just a VPN tunnel back to local servers, or sometimes just re-routed IP's belonging to a foreign ISP (BGP is great stuff).
How the real owners of the company and their real structures are hidden by layered facades of short-lived shell companies and bank accounts in strange places.
How 'Christian' the management at several of these organizations is. They believe they are helping people and doing "gods work".
.. and.. and..

#Comment Re: made: 2008-02-18 03:42:28.398548+00 by: ebradway

It would be interesting to compare payday loans in the US to microcredit loans in developing nations. I bet the payback rate for microcredit is much better than payday loans. But I also bet that the payday loan places aren't really in business to get paid back.

#Comment Re: Microcredit made: 2008-02-18 05:22:43.396641+00 by: pknox

The answer on the microcredit side is easy to get (yeah - that's kind of a plug - they're a favorite client of mine, and support with them is never like pulling teeth). No idea if you can get the figures from the other side of the equation.

#Comment Re: made: 2008-02-18 15:56:15.349433+00 by: Dan Lyke

I think they're entirely different worlds. Those getting microcredit loans know and understand that they're for capital expenditures, those getting payday loans don't have a handle on their regular expenses.

#Comment Re: made: 2008-02-19 14:30:34.885521+00 by: JT

meoun:
They think it's good business, it makes my skin crawl.

I agree with you entirely. I realize the term "business is business" holds a lot of weight to salesmen and those with questionable ethics, which are usually the types in control of companies, but I think the line needs to be drawn somewhere. I think the article sums it up best when it refers to these people as "predatory lenders."