WHEN A NEW BUSINESS GETS SUCCESSFUL AND IT HELPS THE COMMON PEOPLE THE LEFTEST LIBERALS BALKS AND CLAIMS EVIL BEING DONE–JUST BECAUSE THEY NOW HAVE LOST CONTROL OF THE PEOPLE AND THE PEOPLE ARE ABLE TO HELP THEMSELVES–PAYDAY SHORT TERM LOANS BYPASSES BANKS AND REAPS A $4 BILLION BUSINESS SPIKE IN 2013–AWAY FROM THE MAFIA LOAN SHARKS WHO BREAKS ARMS AND LEGS IF YOU DON’T PAY–AND GETS TAKEN TO COURT IN THE LIBERAL COUNTY OF BROWARD

Last week, Yahoo! Finance ran a story titled “The reign of payday lenders may soon be over.”  The article recounts how the advocacy group National People’s Action’s advertisements during the Discovery Chanel’s Shark Week painted the payday loan industry as a bunch of vicious predators. Celebrities John Oliver and Sarah Sliverman joined forces and begged people to “literally do anything else” but take out payday loans.

What, exactly, qualifies Oliver and Silverman, who are both comedians, to give financial advice to people? Nothing.

Of course, Oliver had no problem making fun of TV host Montel Williams as unqualified to hand out financial advice. (Williams participated in a commercial promoting a lending company).

Regardless, the basic problem here is the complete failure to acknowledge that people may actually find these payday loans useful.

The Yahoo! article cites enormous growth in the payday loan industry, from “just over $1.5 billion in 2006 to more than $4 billion in 2013.”  But it completely discounts the possibility that this industry grew so much because it provided a useful service, one that is, on balance, beneficial to both customer and business owner. Sometimes, people may consider it worth it to have money they need now – even if they have to pay for it.

Maybe that’s too difficult to grasp for well-heeled actors and actresses who never run out of cash because they make such a good living from reading scripts and pretending, but many people actually depend on credit to buy things.  (Some payday loan customers even tip their tellers.)

The article makes several claims that critics continue using to mistakenly paint the industry as evil, including:

• “The most nefarious payday lenders charge upwards of 390 percent interest on loans.”

The article appears to get these figures from a Pew study, and it seems as though they are converting fees and interest rates to annual percentage rates (APRs).  But the APR concept represents the yearly interest cost over the term of the loan, so these high percentages typically do not describe anything useful for short-term payday loans.

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