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Big Banks Backing Payday Lenders

Major banks have quickly become behind-the-scenes allies of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.

With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales like Belize, Malta and the West Indies to more easily evade statewide caps on interest rates.

Source: New York Times. Read full article. (link)

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  • paydayloans||

    I know the interest rates are sky high but the cold, hard truth is that the people who go to these payday lenders are the working poor. They do not have the credit for a traditional loan and do not have credit cards. Payday lenders are the only people who will lend them money. It is difficult to "live below your means" when there are no alternatives. There are car repairs, utility bills, and groceries. Sometimes these lenders are a poor persons only option.

  • Bruce Majors||

    Reason covers this topic better than most but it is always assumed that only poor people have cash flow problems and make use of these loans. I know realtors get solicited constantly by companies that give you advances on commission for a hefty fee. I assume other commission based sales people do as well. See for instance http://www.netadvance.com/

  • Bruce Majors||

    Reason covers this topic better than most but it is always assumed that only poor people have cash flow problems and make use of these loans. I know realtors get solicited constantly by companies that give you advances on commission for a hefty fee. I assume other commission based sales people do as well. See for instance http://www.netadvance.com/

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