The Wall Street Journal has a story about Vermont and subprime loans:
…For the past five years, as home loans went to even Americans with poor credit and no proof of steady work, Ms. Todd couldn’t get a mortgage in spite of her good credit and low debt. Vermont banks told the self-employed landscaper that her income stream was unreliable. The 32-year-old changed careers, taking a permanent job as a teacher, to boost her chances.
We understand why someone might opt for getting a payday loan online instead of doing it in person. It’s easier, faster, doesn’t require going to a shady-looking storefront operation where some trained fast-talking huckster might try to upsell you unnecessary add-ons or tack on illegal insurance policies. But the truth is that people who get their payday loans online often end up in a worse situation than they would have if they’d applied in person.
Martha R wrote to tell me that a serious effort is underway in Vermont to launch a state bank. 20 towns will be voting on town meeting resolutions to establish a home-grown, public bank. The objective is not to set up a retail bank (say along the lines of a Post Office bank) but to save the fees that are now paid to large financial institutions and to fund public projects. She writes:
Yesterday we noted the little-white-lie that California had told by exaggerating the traffic to the Obamacare exchange by a factor 8. Well, it turns out that there is another somewhat exaggerated "fact" that appears to have permeated the mainstream media - that significant numbers of Americans have signed up for healthcare already.
Consumers who use online payday lenders may be taken advantage of twice: first, by the lenders’ triple-digit interest rates that flout state caps, then with fees tacked on by the borrowers’ own banks. A new report published last week by the Pew Charitable Trusts states that while consumers often turn to payday lenders in order to avoid writing bad checks or getting hit with overdraft fees, in many cases customers wind up paying overdraft and payday loan fees.