Moms Rising: Payday Lenders – Predator, Not Provider!
4/26/10
A woman I know named Marie is a mother and grandmother with a very large extended family that depends on her. She first walked through the door of a payday loan shop for a little extra money to help her children and grandchildren just last year. Not too long after, she found herself with five payday loans and no way to pay them off. Marie, like so many payday loan borrowers who are strapped for cash, signed a post-dated check she could not cover just so she could walk out the door with cash to help her family that day.
As mothers, we run up against all kinds of unexpected expenses when our children are young and even after they’ve moved out. As true providers, we want to help them any way we can, but turning to payday lenders is like turning to a predator. Heed this warning: whatever the expense, payday loans do not exist to help your needs. Lenders hawk payday loans as an easy way to get cash until your next check comes in. What lenders don’t emphasize is the outrageous fees you pay on that check. Fees that can total 400% APR or more.
Payday lenders say their loans are high-demand financial products that help families bridge unexpected financial gaps. In reality, 90 percent of payday lending business comes from people who get trapped in five or more loans per year. The average borrower takes out nine loans a year – the last eight because they couldn’t pay off the first one. What starts as one financial emergency becomes a series of them caused by a previous payday loan – or loans.
Payday lenders will do whatever it takes to draw new customers through the door, including holiday drawings, kids’ coloring contests, finders’ fees and targeted, aggressive marketing tactics. Lenders were so friendly and personable to Marie that she referred family and friends to them before she recognized the trap she had stepped into. Marie even got a finder’s fee of $25 for each person she referred. But $25 is nothing compared to the hundreds of dollars in interest that each new customer is estimated to pay. .....
Read the entire article at Moms Rising.
Grass Roots Organizing (GRO), an Affiliate of National People's Action, is a community-based statewide, nonprofit organization headquartered in Mexico, MO, with a mission to create a movement demanding economic justice and human rights for all Missourians. 
