Once they get caught in the payday loan trap, borrowers find themselves in a downward spiral. Bled dry by the interest and fees they must pay on the short-term loans, they end up having to borrow again — and again, and again. Nationally, people who take out payday loans are in debt to their dealers for 200 days out of each year, the Inquirer notes…
Yes, which leaves borrowers with less money to purchase lottery tickets, which are not only state-run but also heavily advertised.
Unfortunately the main difference between the Dems and Reps is that the Dems would have the state run the payday loan business.
I am not sure if Dems would run the payday loan business. Payday loans are not even on their top priorities list. States are the ones responsible for taking care of the payday loan mess.
You are absolutely right about the debt trap caused by rolling over the debt over and over again.
Instead of banning payday loans and pushing people in the hands of loan sharks or worse, states should ban the roll-over option period. And by simply closely monitoring and surveying payday loan lenders and their customers the regulators can see where they need to intervene and make this work better.
And certainly alternatives to payday loans must be actively explored and funded.