Payday Loan Bill Cuts Choices for Poor

Michael Calhoun, the head of the Center for Responsible Lending, asserts that payday loans should be capped at 36% APR and

endorses H.R. 1214, The Payday Loan Reform Act of 2009, for imposing limits.

At that rate, a loan of $200 for one month would generate $6 in interest. If Mr. Calhoun and the bill's sponsors really think

one can run a payday business by charging such a rate, they should set up shop. It is not hard to do. Clients will flock to

their outlets instead of the "predatory" lenders they criticize.

The payday loan market is highly competitive and provides a needed service primarily for low-income people. Just let those

folks try getting an instant loan from Citibank for $200 for one month. If H.R. 1214 is enacted, it will be back to thugs

serving the low-income borrower market. That's a "reform"?

Source : Online.wsj.com