Payday loans: They’re gouging the people who can least afford it
"At a payday loan outlet, she wrote a postdated check for $345 to receive the $300 she would need for the operationÑsuch loan operations charge high service fees up front. That gave her five days to cover the check before it would be cashed. But because her weekly checks were a mere $348 at the time, she knew she couldn't cover it. To avoid bank charges and eventual criminal prosecution, she went back to the loan outlet the following week to refinance. That cost her $50. And on and on it went: $50 every two weeks for four months. At one point, after spending more than $350, she asked how much she still owed. Her balance was locked in at $300. Because of lax state laws, payday lenders can refuse partial payment of loan balances, so borrowers have to refinance every payday for a fee or pay off the full loan."
—Pitch Weekly. Payday loan firms are blatantly usurious, capitalizing upon the lack of financial opportunitiesÑand lack of financial knowledgeÑof the poor. "They're just so open and flagrant about bending and going around the law. They just don't care."'
