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Joining us now is -- 2007.
Consumer advocate of the year.
He's an expert on predatory lenders and dirty little practices.
And all the ways that they real you -- -- -- you your money basically.
So while listen closely because this information is information you need to know to protect yourself.
Chris Ware appreciate -- -- -- man thanks -- -- -- -- thank you so much for having me on the program today it's an honor to get to be here.
Hope I can say something useful for -- well I'm sure you can we've.
But we've had you before -- radio show and you just do a great job you know -- you're doing your top of this Christmas Day.
Professor of law at the University of Utah any talk for five years the University of Florida which is I think where you are when you were doing this researching got -- got the big award right yes sir go gators.
So -- -- in Utah announcing in the background very cool well let's talk about some basics a lot of people listening are viewing us tonight don't necessarily know.
The -- -- -- the predatory lending talk about payday lending cash advance how it works for those that don't know let's start from the basics all right okay well.
-- -- -- -- -- How works is you would usually go into a store location and write a check on your personal checking account.
A typical transaction might be you might write -- check for say 360.
She's -- 360 dollars and then they give you 300 dollars in cash and then they're gonna hold onto that check for maybe two weeks.
And then they deposit that check at the end of the two weeks and it and if there's enough money you're checking account.
For the check to clear than you paid sixty dollars for a two week loan of 300 dollars.
But if if.
If there isn't enough money in the checking account or you can't pay it -- they're gonna try to keep charge you sixty dollars every two week week after week after week.
And what's more there's a good chance they're gonna sock you with late fees and insufficient fund fees also to bounced -- feasible from.
The payday lender and did the bank -- the credit union that you wrote the check on.
So it is very expensive very fast.
So what's the average interest -- on the -- -- -- well just if I could just to give a little perspective on that I'm gonna give you two quick statistics the first is that the average interest rates on.
Loans that the mafia the New York City loan sharking syndicates would charge that the height of their power in 1960.
So if you go to Brooklyn and you get alone in the street.
They charge an average of 250%.
Across the country.
Currently the average interest rate on on payday allowances.
So nearly twice the price of a New York City mafia loan down at your local paid -- -- Back give a little bit of perspective.
And they've been you know I've really been having a fit about the fact that they have targeted the military have talked about that a lot on my radio show and and even here at night and finally congress stepped up and and inspect them around a little bit on that.
Because they're really setting these things up just outside the base gates the installation gates and really draining the military talk about what you found on the -- -- on the military well -- Yeah.
At this study with that with another professor Stephen -- at cal state Northridge California and and we tried to map the location and islanders and we found that they were clustering around military bases.
And we are pretty upset about that we think that it's a tragedy -- charges and 400%.
Interest rate loans to the Marines during -- time of war.
But but you know congress stepped up and they passed a -- that -- established a traditional usery limit or or an interest rate cap.
On loans to military personnel so that's still an expense alone 36 for Sunday -- But competitive 4030500.
That they were charging before I think it's a much better deal.
Is is that traditional cap that we had in most states throughout the country throughout the entire twentieth century it was only -- -- -- you know what the word usery what happened to -- laws.
Well we still have -- in some states and the first thing to get is that they're they're two different basic sorts of laws there.
That the banks have a set of laws and then.
Places like Palin -- -- SO laws and essentially there are no easy -- left for banks because of it a Supreme Court decision back in the seventies.
But for non banks like payday -- the state can still have a -- laugh they want -- allows states to Georgia.
New York New Jersey most of New England states word in Ohio just passed a good use a lot.
All those states of ban payday lending run him out of town and now.
South Carolina completely banned them through that thing I don't believe is that those North Carolina northward random completely -- -- -- North Carolina has so it so as -- tragedy that.
-- -- -- You -- -- as old as I am I honestly don't hang out of a memory of payday lenders being out there except in recent years -- What a decade old phenomenon.
Well I'd I'd say it's an ancient -- -- mean that there have been in different civilizations different countries there have been payday loans dating back to biblical times.
But in the United States we never tolerated this in the thirteen original states they -- had interest rate caps Thomas Jefferson Benjamin Franklin George Washington all those guys went back to states.
That ban payday loans because.
-- side isn't immoral and illegitimate.
Type of service it was it was illegal in all those states and it was.
Throughout the most throughout the vast majority of American states all up until about the past fifteen years.
Where we really should completely deregulated and decided that.
Not only -- loans OK but any loans at any price -- okay so I think that's your right it in your lifetime today.
Payday loans are probably a new phenomenon but they're not in world history we've seen this type of thing before.
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