Life on a Small-Dollar Loan | The Daily Signal
Right now we are in Northern Virginia, driving around and visiting some different short-term lender storefronts. We’re visiting these places because recently they have become under fire by the Obama Administration which proposed a series of new regulations which critics say will really hurt and possibly shut down thew entire industry. The industry gets a bad reputation for trapping customers in a cycle of debt. But when the Obama Administration proposed these regulations, they recieved a massive amount of pushback. So were just visiting some of these short-term lending storefronts, talking to customers and an employee, and see what they’r really all about. My credit score is kind of low, and I don’t meet the requirements for a credit score and also for the monthly income – I don’t meet those standards so… turn away immediately. Do you feel like these sorts of places take advantage of you or are they providing a helpful service? I would say that they are offering a good service when you don’t have many options and are in kind of a tight bind of things that you need to pay for… Customers need this service, because, you know… life happens. An You might have a car accident, you might not have enough money to pay your rent, your insurance. So in order for you to be able to keep your job, you have to have a car, So why not come here and get a loan and pay it back? You know, sometimes I need help. I do work, you know. I’m not homeless, or anything like that, I’m not out here without a job. Its just that sometimes my job doesn’t pay me enough to take care of my expenses in my everyday personal life. My name is Jill Revell, I’m the divisional director of operations for our Northern Virginia market. I actually came to the company six years ago and I really did not know anything about our industry. Nothing. I grew up in a county where it wasn’t allowed. I learned very quickly that what we do is a huge service to our communities. Your industry often gets criticized for “trapping people in cycles of debt”… Is that true and what does it cost to borrow, say, $100? Most of our customers, on average, get paid every two weeks, that’s pretty standard, so really what they’re looking at is $28 in interest and fees. So they have a month to pay me back, and it costs them $28 in addition to the $100 principle, obviously that they took to begin with. Personally I use them based on if I need the money right then and there and if I don’t have it available. Fortunately, I am blessed that I don’t use them that often anymore. B But when they are available and there’s a need for a time, you can go there and get the loan. Kelsey: Have you ever been misled –
Customer: No… Absolutely not. They provide you a sheet and they let you know and they verbally tell tell you how much the interest will be and how much you will be paying back at a particular date, um… they let you know when the date will be and how much it will be. So there’s – there’s no misleading that I have experienced. What these regulations actually do is to require lenders to access a customers’ ability to repay that loan. This involves looking into their monthly income, their housing expenses, and any other major expenses they may have throughout the month. If that customer does not meet certain criteria outlined in these regulations, then they will be denied that loan and might not have another option. What do you think would happen to your customers if your branch were forced to shut down? *sighs*… I don’t think that they are going to have any other option outside of turning to their religious groups or their community organizations — women’s groups, stuff like that, – — and unfortunately, they don’t have the funding to help these people. When you start to take away people’s access to the money they genuinely need to be able to survive, then what? If you do the math: I don’t have enough money coming in – I’m not going to get paid any back, any type of loan back, I would say… I think it’s a good idea to put a cap on the interest rates because they are extremely high. They are higher than what a credit card would be, and that type of stuff but I guess its just something kind of fast, you’re kind of in a bind, , I think you’re in a rush, you’re panicking, ‘what can I do?’. I think you just kind of grab at what you can get and kind of hope for the best, I guess… if you are in that kind of situation. o when I heard about this place, um, I came here. They’re very nice. They make it very easy for you. They don’t make you feel like you’re a bum. They don’t make you feel like you are less of a person because you have to come in here and get a loan. You know what I mean? So I would vote against anyone trying to do anything to these people right here. That’s not right… As of now, these regulations are still moving forward, but under a new, Republican Administration… We will have to wait and see if they really are here to stay.