Did you know that 10 percent of Ohioans say they’ve taken out a payday loan in the last five years?
That number was included in an Associated Press story we published recently that said federal regulators are taking a look at the companies that provide cash-advance loans to borrowers who take the money against their next paycheck. Interest rates, the AP said, can be as high as 300 percent on some of these loans.
Spokesmen for the $46 billion payday industry told the AP they “offer a service, that if managed carefully, can be very helpful to a diminished middle class.”
Problem is, folks using the service are often already in a situation in which it’s tough not to end up deeper in hock. Regulators, reacting to consumer complaints, are preparing the first federal rules to control the industry.
What do you think? Are payday loans useful or usurious? Email me at email@example.com.