Even the Navy wants to see more limitations for these types of loans. Apparently a high number of their sailors are finding themselves knee deep in debt with these places. Washington state has a cap of 391% APR for these loans. (They are short term loans at high interest that, when calculated out to an APR, really seem excessive). There are 36 payday lenders within 3 miles of the military bases in Tacoma. Potentially twenty percent of active duty personnel used a payday loan last year. (Although some believe the number may be down around 7 percent, which is still significant)
Here’s a link to the article:
http://www.komotv.com/stories/41656.htm
Yeah I know all too well about those places. I finally paid off two loans I had at payday loan locations yesterday. I went back in my checkbook and since May 2005 I have been going in to each of these places every two weeks to pay back and re-borrow the money. Over $1000 in interest charges for that time period…ridiculous!!
At least the military is doing something about it. My son is in the Air Force and they get lectures on this stuff (and on suicide, drinking, drugs) all the time but stopping stupid behavior, like the article says, is pretty hard no matter how you try.
It’s no one’s responsibility to limit this stuff. Bad decisions shouldn’t be policed. I’m all for education, but not for limiting people’s choices in order to keep them from screwing up.