Usury by any other name
“Usury” is a word you don’t hear too often anymore, at least outside the Department of Medieval Studies.
Condemned by the 12th century papacy, its practitioners relegated by Dante to the fiery ninth circle of Hell, the practice of lending money at exorbitant interest rates has been morally suspect as long as there have been sheep to fleece. Our modern, more laissez-faire attitude toward personal economics has taken some of the stigma out of high-interest lending, but a more descriptive term lives on in the vernacular: “loan sharking.”
Hard to imagine what else you might call lenders who charge up to 390 percent annual interest for short-term “payday loans.” Thankfully, 23rd District Rep. Sherry Appleton is behind legislation (HB-1020) now making the rounds in Olympia to cap the interest on short-term lending at 36 percent per annum. This sensible, consumer protection legislation deserves support.
With the easy availability of credit cards, Americans each year sink deeper into the quicksand of consumer debt. Yet the Washington Post reports that a popular conception – that we’re running up high-interest plastic charges to buy wide-screen televisions and bankroll weekends in Vegas – is decreasingly accurate. The debt culprits these days are unforeseen hospital bills, onerous housing payments and high college tuition. So it’s easy to see how payday loan outfits – who would get no sympathy from Dante – look attractive to those who find themselves suddenly short of cash. “Can’t pay the bills this month? No problem! Come on down to Moolah Mart and we’ll help you get by until payday – at which time you can pay us back at (cough cough) a modest fee.”
That fee is anything but modest; the Federal Trade Commission reports that patrons of such predatory lenders can end up owing $60 in interest to borrow $100 for mere weeks. Compound that for bigger amounts over more loan periods, and it’s a downward financial spiral few could escape.
The issue came to Appleton’s attention thanks to Kitsap military officials, concerned that unwary servicemen and women were being taken advantage of off-base; her legislation would extend protection to all payday loan patrons. Banks, Appleton notes, seem to get by okay doling out credit at much lower rates, so it’s hard to imagine the storefront outfits can’t survive on 36 percent. By any other name, it’s still usury.
Better still if the state’s 700-odd payday loan outfits went away altogether, replaced by credit unions or consumer counseling services. Socially, we’d get a much better rate of return.
Also under consideration in Olympia is legislation that would begin to curb the use of cell phones by motorists.
Senate Bill 5037 targets use of hand-held gizmos as a “secondary” offense, that is, drivers could only be cited if they were pulled over for another infraction. It’s a start.
Islanders got a crash-course in the dangers of phone-impaired driving several years ago, when bicyclist Chris Stanley was struck from behind by a motorist who veered onto the highway shoulder while yakking away. Stanley was pitched into a gully 85 feet from the point of impact, and endured a tough physical recovery. Since then, a University of Utah study has found cell phones and alcohol to be an essentially equivalent impairment for motorists. It’s time to act.
We suspect this is a bill that Bainbridge Islanders, especially our vocal advocates for bicycling and pedestrian safety,
will want to rally behind. Our own Sen. Phil Rockefeller is
co-sponsor, and the text of the bill can be downloaded at www.leg.wa.gov/legislature.
Not to reduce the issue to a bumper-sticker sound bite, but really: Hang up and drive.