# Arizona Prop 200: Payday loans **URL:** \ **Category:** Great Debates\ **Created:** [October 4, 2008, 7:50pm UTC](https://boards.straightdope.com/t/arizona-prop-200-payday-loans/466473 "2008-10-04T19:50:36Z")\ **Posts on this page:** 6\ **Page:** 2
**Author:** ![Tastes\_of\_Chocolate](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tastes_of_chocolate/32/3232_2.png) [@Tastes\_of\_Chocolate](https://boards.straightdope.com/u/Tastes_of_Chocolate)\ **Post date:** [October 9, 2008, 8:23pm UTC](https://boards.straightdope.com/t/arizona-prop-200-payday-loans/466473/21 "2008-10-09T20:23:34Z")
> [@levdrakon](#): > > IWhen I was in the military, base commanders would sometimes declare certain local businesses “off limits” to military members because while their business was legal, it was ripping people off. Those “rent-to-own” furniture places come to mind. I’ve got a sister-in-law that used to manage one of those rent-to-own stores. Some of her customers were people that wanted to change out the livingroom furniture every 6 months. Some were only going to be living in the area for a year, and didn’t want to buy furniture. Some had the refrigerator break down, and didn’t have a couple hundred dollars on hand to buy a new one. As mentioned with the payday loan places, the terms are all clearly set out. You get the washing machine and pay us $xxx per month for it. That’s not ripping people off. That’s dealing with a different market segment then Citibank, Wells Fargo, or even a JC Penney’s card. ---
**Author:** ![levdrakon](https://avatars.discourse-cdn.com/v4/letter/l/49beb7/32.png) [@levdrakon](https://boards.straightdope.com/u/levdrakon)\ **Post date:** [October 9, 2008, 8:36pm UTC](https://boards.straightdope.com/t/arizona-prop-200-payday-loans/466473/22 "2008-10-09T20:36:13Z")
> [@Tastes\_of\_Chocolate](#): > > I’ve got a sister-in-law that used to manage one of those rent-to-own stores. Some of her customers were people that wanted to change out the livingroom furniture every 6 months. Some were only going to be living in the area for a year, and didn’t want to buy furniture. Some had the refrigerator break down, and didn’t have a couple hundred dollars on hand to buy a new one. > > As mentioned with the payday loan places, the terms are all clearly set out. You get the washing machine and pay us $xxx per month for it. > > That’s not ripping people off. That’s dealing with a different market segment then Citibank, Wells Fargo, or even a JC Penney’s card. It’s not ripping people off the way you describe it, but when lots of people end up in fine-print deals where they pay thousands of dollars for shit furniture worth dozens of dollars, it’s ripping people off. ---
**Author:** ![FallenAngel](https://avatars.discourse-cdn.com/v4/letter/f/5daacb/32.png) [@FallenAngel](https://boards.straightdope.com/u/FallenAngel)\ **Post date:** [October 9, 2008, 10:09pm UTC](https://boards.straightdope.com/t/arizona-prop-200-payday-loans/466473/23 "2008-10-09T22:09:54Z")
> [@levdrakon](#): > > The only people I’ve known who use these places use them every month, because they always come up short after paying last month’s fees. It’s a nasty cycle people fall into. > > Yeah, it’s better to not pay your bills for a month, then get sucked into the payroll advance scam. > > Letting people make their own stupid mistakes means letting their bills go unpaid, not lending them money so they become your financial butt bitch. This bill would eliminate, or at least reduce the ability to do that. In order to appease the powers that be, the payday loan industry eliminated the ability to cycle your loans by repaying it and then immediately taking out another one. There’s now a mandatory gap included in the language of the initiative. I’m voting in favor of it. While I don’t like the way the stores have sprouted up here in Phoenix in the last 8 years, they serve a useful purpose to a decent portion of the citizenry, a portion that should be allowed to make their own decisions about their finances without having to resort to illegal loan sharks. ---
**Author:** ![PatriotGrrrl](https://avatars.discourse-cdn.com/v4/letter/p/9dc877/32.png) [@PatriotGrrrl](https://boards.straightdope.com/u/PatriotGrrrl)\ **Post date:** [October 9, 2008, 10:14pm UTC](https://boards.straightdope.com/t/arizona-prop-200-payday-loans/466473/24 "2008-10-09T22:14:50Z")
> [@Carnacki](#): > > IActually, regarding the “paying interest every two weeks”, that was eventually outlawed in California. A person who couldn’t afford to pay the whole amount would often struggle to come up with the money (often borrowing from another payday lender), pay it off, and then turn right around and borrow it again. > > But here’s something to consider. Many banks that offer direct deposit will also offer to advance you money on your upcoming direct deposit. The loan plus a fee is then taken out automatically from your next direct deposit. Is this type of transaction also affected by the legislation? > > It sounds an awful lot like our business, actually, except they have a much easier time getting paid back… The payday loan businesses that I am familiar with work essentially the way the bank does.. They will only give a loan to someone who has direct deposit, and when you get the loan you give them permission to take either the full amount or a partial payment out of your bank account on the due date,. But, (unlike your employer?) if you opt for a partial payment, it is not all interest - part of it pays down the principle, so it is impossible for someone to keep paying interest on one loan forever. ---
**Author:** ![ultrafilter](https://avatars.discourse-cdn.com/v4/letter/u/3d9bf3/32.png) [@ultrafilter](https://boards.straightdope.com/u/ultrafilter)\ **Post date:** [October 9, 2008, 10:29pm UTC](https://boards.straightdope.com/t/arizona-prop-200-payday-loans/466473/25 "2008-10-09T22:29:12Z")
[A recent study](http://www.dartmouth.edu/~jzinman/Papers/Karlan&Zinman_ExpandingCreditAccess_sep08_rfs2.pdf) finds that payday loans are on the whole beneficial to the recipients. ---
**Author:** ![levdrakon](https://avatars.discourse-cdn.com/v4/letter/l/49beb7/32.png) [@levdrakon](https://boards.straightdope.com/u/levdrakon)\ **Post date:** [October 9, 2008, 10:42pm UTC](https://boards.straightdope.com/t/arizona-prop-200-payday-loans/466473/26 "2008-10-09T22:42:48Z")
> [@ultrafilter](#): > > [A recent study](http://www.dartmouth.edu/~jzinman/Papers/Karlan&Zinman_ExpandingCreditAccess_sep08_rfs2.pdf) finds that payday loans are on the whole beneficial to the recipients. That’s nice. The residents of my neighborhood have found we don’t like crack dealers. Sorry, no cite. We were going to ban Taco Bell, but I blocked that one. I needs me my “fourth meal.” [Previous page](https://boards.straightdope.com/t/arizona-prop-200-payday-loans/466473.md?page=1)