The payday Trojan horse
By Joseph Sabino Mistick
Published: Saturday, June 15, 2013, 9:00 p.m.
The tale of the Trojan horse, and the trickery it symbolizes, provides a dead-on example of the most recent efforts to legalize payday lending in Pennsylvania, led by a number of Republican state senators this time around.
During the Trojan War, the Greeks built a giant horse, filled it with soldiers and bamboozled the Trojans into thinking it was an abandoned tribute to the Goddess Athena. The Trojans took it within their walls. When Greek soldiers emerged that night, they opened the city gates to their army and Troy was sacked.
The Senate version of payday lending is a lot like that, recently reintroduced as a prettied-up alternative to a similar House bill that went nowhere last year. Then, as now, payday lending was opposed by numerous groups that represent Pennsylvanians who struggle from paycheck to paycheck.
This time, in its latest Senate version, predatory payday lending is being called a “micro-loan program.” This must not be confused with real micro loans, which help small startup businesses that are often women- or minority-owned.
The content of this legislation is dangerous to poor communities and struggling families. After finance charges, the annual cost of these loans can exceed 300 percent. As many as eight two-week loans can be made, each within days of repayment of the last loan, and there is even a loophole for that, providing too strong a temptation when paychecks fall short of the cost of living.
Most draconian, the lender can require direct access to the borrower's personal bank accounts. This means that lenders will get paid first by simply taking your money, before the landlord and the utility company are paid, before you can buy food or shoes or medicine for your kids.
And our nation's military seems to be at considerable risk from payday lenders. In 2006, Congress asked the Department of Defense to study the effect of payday lenders that were clustered around military bases.
Citing the vulnerability of “young and inexperienced borrowers,” the Pentagon concluded that “predatory lending undermines military readiness, harms the morale of troops and their families, and adds to the cost of fielding an all-volunteer fighting force.”
Since before the Code of Hammurabi, the allowable interest on debt has been regulated by civilized societies. And states have enacted usury laws to discourage loan sharks and the vigorish they charge, those unconscionable interest rates.
Even Jesus of Nazareth had enough, throwing the usurious money changers out of the temple, earning a pretty good reputation as a man of the people. It is hard to believe that any state senator or representative would want to be known for inviting modern money changers to do business in the commonwealth.
Joseph Sabino Mistick, a lawyer, law professor and political analyst, lives in Squirrel Hill (SabinoMistick@aol.com).
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Analysis: Steelers could fill needs with free agents while not spending big bucks
- Police charge Westmoreland County priest in $124,000 theft case
- Upper St. Clair woman’s death at Drexel probed as possible meningitis
- Steelers to release LaMarr Woodley; Taylor restructures contract
- Pittsburgh police to tear up parking tickets written ‘erroneously’
- Woman sues UPMC over pregnancy drug test
- Sewickley teen’s art helps her deal with challenges of epilepsy
- Pittsburgh’s Rubber Duck to be redeployed to Norfolk
- Crosby lifts Penguins over Capitals in last game of road trip
- ACC Tournament manages to deliver an inherent history lesson
- Small plane crashes at Washington County Airport