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Ozarks Tonight: Predatory lending - YouTube
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welcome everybody to Ozarks tonight i'm
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brian Califano joined by our Ozarks
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first contributors nick reed and amy
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Blansett and sometimes i come to you
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guys and i say i don't know what we want
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to talk about you guys have any ideas
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I'm kind of a blank slate and Amy
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brought up a really great topic that
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we've reported on a lot here at the
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station I'm sure you've talked a lot
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about on your radio show it's payday
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lending the payday loan stores that we
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see around town and I did some research
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after you brought the topic up Amy I was
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amazed to see a couple things one the
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rate of Missourians using these lenders
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is about twice the national average and
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to these lenders can charge up to almost
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2,000 percent interest on a loan correct
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whoa yes so what are we doing about this
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well so the number of states are doing
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different things to where they're
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creating limitations they're creating
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caps what we have to be careful when
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we're looking at all types of predatory
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lending so we talk about payday but we
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forget that the buy here pay here the
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teller --nt those are also predatory
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lenders who charge 500 percent or more
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on a product that's being consumed so
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what they're beginning to look at is how
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do we cap an interest rate but as we
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begin to cap interest rates how do we
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not put this business out of business
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because it's a necessary part of our
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financial system because for a bank if
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we're not charging 36 percent or more on
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these loans they're not making money
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which means we can't employ individuals
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to run the bank so what we've got to
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look at our systems in place that allow
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for individuals to be banked or to use
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these but to not be charging 2000% to
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where no one can ever get out of the
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cycle
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Nick at what point does the payday
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lending owner walk out onto the sidewalk
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and put the gun to the person said to
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bring them inside to sign for the loan
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oh that doesn't happen oh yeah I'm
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pretty grou choice on this thing I think
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people they want to light their money on
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fire that's their
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choice to do so if they want to enter
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into what most people would think would
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be a very poor financial decision in
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terms of lending I don't think I have
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the right to tell them you can't do that
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you want to borrow money from somebody
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at a 5,000 percent interest rate that's
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their right to do it just like it's the
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right to you know live paycheck to
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paycheck get money go buy a TV that they
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don't need or go down to downstream
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casino or buy lottery tickets or go to
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the bar and drop $200 of their paycheck
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buying shots for their friends that's
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their right that money is there to save
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to yourself and I say you as in most
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people who go down this road really to
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justify what you think the individual
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who's walking into a payday lender is
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like and that is not the population that
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are using payday lending in Springfield
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we're collecting a lot of data on who is
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using it and most of the payday lending
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is under $250 so it's not someone who's
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getting $200 to go below the gas station
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most of the individuals who use it say
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that it's going to rent it's going to
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their utilities and those sorts of
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things now we'll say it's holiday some
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of them might go in through their check
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and and they're spending $50 on
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Christmas for sure but this isn't
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someone who's walking in and getting a
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two thousand dollar loan it's someone
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who's making $10.50 here in Springfield
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Missouri working full-time and yet their
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tire blows the car breaks down and even
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with the best budget even if I asked you
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to on a best day live on this budget
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stuff happens and at that wage it does
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not matter how much you want to walk
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into a bank and get a proper loan you're
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not doing it well in my point wasn't
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that's what they're using it for my
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point is if why do we not stop people
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from spending money on those things as
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well I mean if we're going to say as a
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society we're going to use the force of
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government to decide how people are
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allowed to use their money because if we
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see it as unwise then why stop at payday
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loans why not stop at lottery tickets
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and TVs we don't need and video games do
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you appreciate that the FDIC creates
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regulations so that
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when you walk into a bank you get to
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access money at a low and fair rate what
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do you mean do I appreciate it I'm not
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sure I mean well I don't use a bank I'm
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a credit union kind of guy firstly but
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that's your money then but but it's yeah
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I mean there's still regulations in the
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credit union you can't walk in and
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they're gonna say alright well today
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we're gonna charge two hundred percent
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no ice and if you don't like it then
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every other bank down the streets also
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charging two hundred percent so we just
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decided no I would be fine with that
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extreme because they wouldn't last very
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long doing that right because we have
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voting capacity we have the you know the
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network in order to make sure that they
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wouldn't last very long but when we look
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at like what happened in the 80s where
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interest rates did go up to you know
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high percentages we saw housing
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purchases dropped we saw so we all get
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to appreciate at least the three of us
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sitting here that we can walk into a
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bank and borrow funds at 5% right we are
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never going to walk into a bank and
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they're gonna say well you know your
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credit score dropped 20 points so today
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your loan is now at 500%
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what would the harm be nick of enacting
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legislation because i think republicans
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in Jeff City are on board with some of
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this to say okay 100 percent Interest
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that's arbitrary but that's a lot less
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than the top margin now that's all you
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can charge on these things what would be
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the danger from a policy standpoint of
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doing well for one like I said I just
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don't believe in denying people the
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right to do what they want with their
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money whatever it is but aside from that
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would it like really restrict freedom
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and all that kind of thing well sure I
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mean if I'm somebody and for example I'm
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a high risk for whatever reason and
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because of that high risk if you have
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some sort of cap when it comes to how
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much in one's institution can gamble on
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me if you will and then so they think
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well we're just not going to offer any
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longer you know what I oftentimes hear
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this with payday loans well this is the
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only place they can go well what happens
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when they're not there then where do
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they act what about a non-profit
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alternative does many nonprofits yes so
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in Springfield and even outside of
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Springfield st. Louis
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have some great systems and what they're
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doing I'm so locally we have several
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churches that got together and put
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together funding so the individuals
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could come in and loan against one of
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the things we have to be careful in
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those nonprofit sectors doing that is
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they still need to be in the banking
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system so one of the things we've looked
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at that's been successful is to actually
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put money into a fund at a bank so the
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individuals can do micro loans against
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it the bank keeps it in-house that does
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a lot less of the paperwork and then the
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individual is able to enter the banking
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system credit scores increase and now
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they're baked and that is really what
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makes a difference because the other
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thing about predatory lending you might
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be paying everything on time you might
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walk in and use it correctly where you
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pay off each time but none of that gets
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reported on your credit report so it's
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neither good nor bad oh wait a minute so
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if they don't pay the loan that's not
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negative credit information not until
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they actually will go in and create like
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a mark against them to say we're now
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sending you to collections but it
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doesn't matter let's say that I pay the
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fee and I'm defaulting so I'm not
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actually paying the loan off per my
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agreement I can pay a fee and it just
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keeps setting it off that doesn't show
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up against me negatively until it goes
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to collections but the same if I pay
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everything on time and use it correctly
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it's not a banked system so I'm not
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building my credit report by using them
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interesting fascinating I don't even
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know what the answer of this stuff is
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nobody really does know because though I
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do I thought I continued to wealthy
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individuals take advantage of you to
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find I didn't believe in freedom for
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everyone wealthy or otherwise agreed
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Annie bland said we will be back after
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this
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