If I didn't know Steve Hickey better, I might think he was trying to draw me in to a blog trap. Several days ago the pastor and legislator took a swipe at the Occupy movement, calling it little more than "the lazy versus the greedy." His post provoked me to respond with video from some former Marines engaged in the Occupation. Pastor Hickey subsequently repeated his concern that ill-mannered Lefties will take these protests too far.
Yet tonight I return from a Spearfish supper and stroll to find this dessert: Pastor Hickey advocates expanding the Occupation to include South Dakota's payday lenders. He spots a $60,000 sports car outside a Dollar Loan Center and blows a gasket at our local predatory lenders:
They are greedy lenders who push a defective product intentionally designed to be a debt-trap. They are vultures who circle those who struggle to get by [Rep. Steve Hickey, "Time to Occupy the Predatory Loan Shops in SD?" Voices Carry, 2011.10.19].
The good Hickey is on point. It's one thing to gather for a pleasant stroll downtown or out in the pasture to express solidarity with the general principles of a movement happening mostly elsewhere. It would be quite another to direct our local sympathies and energies toward attacking the Wall Street demons incarnate in local form, our very own payday lenders who prey directly on our fellow South Dakotans. We could cobble together a crazy coalition of Tea-flavored Hickeyites and yearning Occupants to produce the first concrete legislative action of the whole Occupy movement: an effort to resurrect the anti-usury legislation that Rep. Hickey proposed during the 2011 Legislative session. South Dakota could show the Occupation how to grow from angry but amorphous Lefty camp-out to focused, results-oriented policy campaign.
South Dakota's payday lenders aren't the biggest bastards, but they're our bastards. They represent the sins of Wall Street practiced right here on West 41st Street, Lacrosse Street, and North Street. Rep. Hickey, you should float those anti-usury bills again. And would-be South Dakota Occupiers, if he does, you had better bring your signs to Pierre and to the crackbarrels and back Rep. Hickey's legislation with all your righteous might.
But for Rep. Hickey's sake, please mind your manners.
"South Dakota’s payday lenders aren’t the biggest bastards, but they’re our bastards."
They're big enough bastards for anywhere. They are several legal loan sharks here as well.
Well said Cory. I wish that Hickey had mounted the initiative campaign that he talked about in his post. It's too late now.
If he proposes the bill, I will be contacting the legislators that I know to urge them to support it.
Maybe the right reverend should padlock his ample glutei to that $60,000 sports car, get arrested, then hawk his vestments to show up in court to for what he purports.
While I would never put payday lenders in the same category as the Red Cross, I think it's important to understand what they do and how they work before grabbing your pitchforks and lighting your torches. After speaking with someone semi-close to one of these lenders I learned that, when used correctly, these types of loans do serve a purpose. You need to understand why people would go there to get a payday loan in the first place - to avoid paying huge overdraft fees on bounced checks, which are essentially short term loans from your bank. I don't know what an overdraft fee is these days, but I'm told it's around $35. So if someone needs their car fixed to get to work, are they better off getting charged $35 interest for a $5 lunch every day for a week or two, or getting a short term loan for a one time fee? Also, if I understand correctly, the amount of money they can loan is capped at $2000, unlike banks who will loan you the largest amount they can. I also don't think payday lenders get taxpayer bailouts if they fail. Again, I'm not trying to defend them entirely, I just think a little more investigation is needed.
Erika, it seems your points only support the idea that payday lenders are a harmful form of business based on preying on people who are already in bad situations. And how does paying a $95 fee up front beat and then sacrificing even more of your paycheck in exorbitant interest beat simply paying the overdraft fee and putting your full paycheck in the bank?
Don't be fooled by the "providing a useful service for folks in need" marketing line with which the usury industry defends its predatory lending. Review Rep. Hickey's critique linked above: the industry makes its profits by preying on military families and other people in tight financial situations. Mobsters do the occasional good deed for the neighborhood, too, but that shouldn't stop us from shutting them down.
The big banks are often also the payday lenders in another disguise. Bank overdraft charges are absurd. They should be replaced with an automatic loan based on the average account balance or some such. This kind of overdraft protection was available years ago and is a valuable service. Big banks with obscene overdraft charges enable the payday userers and ripoff artists.
Justifying payday loans because you let banks charge way to much for overdrafts is deciding that we could just have more wrong because we have wrong already. You will never climb out of that pit.
Payday loan companies are just a wrong way to do business. We did not have them before we had gambling. So look at the real problem and solve that. Payday loans are the worst of the greed that the Occupy wall street people have noticed. They are not the biggest problem but to their customers they are the biggest problem they might find. IF you want to know how they see themself, I noticed when they built that payday loan company at the curve in the road on west eleventh turning into west twelth street, you will notice that they built the collections building bigger than the loan building. So you know they knew themself when they built it that collections is where their work and their profits would be. They knew themself that these loans do not work out well.