Letters: Reining in payday lenders
Re “Payday lenders can’t hide ugly rates,” Column, Feb. 11
The payday loan industry can try and dress up its loans to look less abusive, but it’s just putting lipstick on a pig.
Californians pay $578 million in interest payments on payday loans every year, with interest rates ranging from 175% to 480%. It’s no wonder the proposal to have the U.S. Postal Service provide low-interest loans is attracting so much attention.
Even after accounting for jobs created by the industry, the Insight Center for Economic Development found that payday lenders are responsible for a net loss of $135 million in economic activity in California every year. Imagine the boost to our economy if this money was spent on local goods and services instead of lining the pockets of shareholders and executives at payday loan companies.
The Consumer Financial Protection Bureau will design rules on payday lending this year, and we will suggest putting the industry on a diet of safeguards and more reasonable loan terms.
Liana Molina
San Francisco
The writer is the payday campaign organizer at the California Reinvestment Coalition.
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