Summary
It may surprise you that these non-bank financial service providers include pawnshops, payday lenders and short-term lenders. Ae importantly, they also provide other invaluable products such as reloadable debit cards and installment loans. Yet, most people's knee-jerk reaction when they hear the words "payday lender" is to accuse these businesses of predatory lending practices because of "excessively" high interest rates.
In the absence of domestic providers of non-traditional services, consumers have much more costly options such as going to offshore businesses that are largely unregulated. They can charge consumers a fee of $50 per $100 in the absence of any oversight. In states like New York, where there is virtually no small dollar or short-term lending allowed, countless numbers of New Yorkers (estimated to be as high as 100,000) are conducting financial transactions with overseas providers in a totally unregulated atmosphere. Even free marketers can see the need for enforceable rules and adequate oversight to make sure people are being treated honestly and fairly - a situation that does not exist in this offshore market place.At their heart, protests center on the belief that law-abiding Americans cannot handle the responsibility of making tough financial decisions themselves. Before every transaction, fully read and understand the terms of the contract. We need to encourage and nurture personal accountability, not retard its development. Everyone can comprehend that if you put up something of value for cash-in-hand, you are going to lose that valuable if you don't pay the loan. By taking the stigma and legal limitations away from nontraditional lenders, Americans can lay all the cards on the table and confidently decide which financial institution best serves their needs and abilities.Several pieces of economic data have raised serious questions about the ability of a whole subsection of Americans and small business owners to take the first steps toward building wealth - namely, the lack of credit. [...] the constriction of consumer credit is the product of banking regulators who have continued to add to the hurdles that banks must meet to make loans, including raising the banks' reserve requirements.See the full content of this document
Extract
Cash Flow Dilemma in America
Are banks and state governments unwittingly colluding to prevent millions of Americans from being able to afford to pay their bills or profitably run their small businesses?
Several pieces of economic data have raised serious questions about the ability of a whole subsection of Americans and small business owners to take the first steps toward building wealth - namely, the lac...See the full content of this document
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