Friday, December 18, 2009

Politicians worse than payday lenders

Payday lenders have been unsuccessfully trying to get the law that allows them to operate extended. Without this change, the industry will cease to exist on July 1, 2010.

You may have noticed that various politicians, including Attorney General Terry Goddard, have lined up to bash the payday loan industry. Typical of this bashing has been regulator, er, legislator Debbie McCune-Davis bashing payday lenders for charging a 391% annual interest rate.

But when it comes to usurious activities by our city officials, Goddard and McCune Davis look the other way.

In late September I received a $16 parking ticket from the City of Phoenix for an expired meter. Actually, someone else was driving my car, and I paid the ticket, but the City says the payment arrived too late and has assessed extra charges. It's now mid-December, about two and a half months after receiving the ticket, and the $16 ticket has grown to $58.

For those of you with a calculator at home that's a 1,226% annual interest rate, a rate that would make your neighborhood loan shark blush.

I've got no love for the payday loan industry, but I would have been much better off taking a loan out from a payday lender, even at 341% interest, and paying the City with that money. Of course, the politicians want to rid me of that option by eliminating payday lenders. It's also interesting to note that payday lenders can only sue you if you don't pay, whereas the City will take your car away for nonpayment (but don't worry, you can take their crappy bus service or trolley around if you lose your car!)

So I ask you, who is worse, the payday lender or the politician?


  1. Yeah, those payday lending shops on every corner are just such a nice touch to the Phoenix look. ;) Please... Payday lenders are loan sharks - face it.

    Politicians that support these loan sharks like the current Governor are the problem. The ones trying to protect the consumer/constituent (aka: AG Terry Goddard) are not.

    oh and try to pay the meter next time and then you don't end up with the ticket. :rollseyes:

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