The story of Robin Hood – of the noble bandit stealing from the rich in order to give to the poor – is a popular cultural motif. It’s a shame that that’s just not true, that the real scenario is the rich stealing from the poor in order to give to themselves. Predatory lending has become one of the more common ways that this is now happening. Unfortunately, these practices are not even thought of as stealing. Actually, they are perfectly legal.
So-called “payday” services, including check-cashing and short-term loans, are the most scurrilous of these business activities. When I typed “payday services” into the Google search engine, I found one directory that included 66 separate providers, and that was only on the first page of results!
In Columbus, Ohio, a local community advocacy group has been calling for legal limits on these services. BREAD (Building Responsibility, Equality and Dignity) is demanding that the Ohio legislature limit the interest rates that can be charged. In a story written by Sherri Williams for the Columbus Dispatch (May 8, 2007), an example was given of a woman who borrowed $500 and ended up paying back $3,000. Loan sharks might actually provide better interest rates than that! Obviously, these are lucrative businesses, since the number of shops in Ohio grew from 107 to 1,562 in the ten years between 1996 and 2006. Of course, when interest rates can be as high as 390% a year, who should be surprised?