Not sure why you’re downvoted because it’s true.

People desperate enough to use payday lenders have no other options. And the high interest rates reflect the risk.

Take that option away and the need doesn’t magically disappear, they just go to black market lenders where there really is no backstop at all.

Far better to regulate.

> People desperate enough to use payday lenders have no other options.

Not always true, some folks misuse them for a variety of reasons.

Take the option away in the UK and a friend’s boyfriend wouldn’t have been able to use an app to take out a bunch of short term loans in her name for Xbox games…

So I think sometimes these facilities are used frivolously. You’re right that a portion of users in real hardship would turn to “informal” lending if these lenders were to disappear. But it feels like we as a society should come up with a better solution there really.

>Take the option away in the UK and a friend’s boyfriend wouldn’t have been able to use an app to take out a bunch of short term loans in her name for Xbox games…

There's already a solution there, she could take him to court to recover the money. Your argument is basically "ban X because X can be used in an illegal way".

No, my argument is that not every use of x constitutes immediate, severe need, so the consequences of banning x would not necessarily be to drive all service users of x straight into the arms of loan sharks.

Further to that, my argument is that for people who are in such severe need that they would then turn to loan sharks, there is probably a better solution out there that we as a society should be looking into, than usurious payday lenders.

At no point was my argument anything close to “ban X because X can be used in an illegal way"

This will be a fairly contentious opinion, but I believe if there exists a class of business that is recognizably harmful to that level, which we only keep around so as to prevent criminal alternatives, then such businesses should be replaced by government run services.

In fact, I personally believe this scenario is likely the most essential use for government run services.

I don’t agree with your secondary point, but I agree so much with your primary point that my inner monologue was screaming “just say government, it’s okay, you’re correct and we all know this is where this is heading” as I was reading it.

"which will be filled by shady loan sharks"

You are replacing friendly-looking loan sharks with door-to-door salesmen with clearly illegal loansharks.

For the same reason you don't want cocaine sold near "fun toys for kids"

Each state has usury laws, but there are of course loopholes and exclusions.

https://www.upcounsel.com/lectl-state-interest-rates-and-usu...

In 1980, due to high inflation, the federal government passed a special law that allowed national banks to ignore state usury limits and pegged the rate of interest at a certain number of points above the federal reserve discount rate. In addition, specially chartered organizations like small loan companies and installment plan sellers, such as car financing companies, have their own rules.

That doesn't seem unreasonable. Really, the usury laws should be linked to the federal discount rate anyway.

If 20% is usury when the law was written and prevailing rates were 10-15%, 19% shouldn't be allowed when prevailing rates are 0-5%

>That doesn't seem unreasonable.

Sort of:

The 1978 case Marquette National Bank v. First of Omaha Service Corp. unanimously held that nationally chartered banks may charge the highest rate allowed in the bank's home state. This is why so many banks are located in states like Delaware and South Dakota, which have very liberal or nonexistent usury laws. So even if you live in a state that has a very low usury limit, it typically has no bearing on the interest you pay on your credit card.

https://caselaw.findlaw.com/court/us-supreme-court/439/299.h...

1) Professional buyers are defined as any person not kin or well known to the seller that has bought another property within the last 3 years.

2) Professional buyers contracts must allow a 30 day cooling off period in which the seller may back away from the agreement without punishment.

3) The 30 day cooling off period is initiated by the buyer prominently posting the offer in the local MLS service or similar prominent and accessible system. The buyer is responsible for ensuring any alternative offers during this period are conveyed to the seller.

4) The buyer and seller may avoid the 30 day cooling period by having a certified appraiser conduct an appraisal of the property and executing the sale at no less than 6% below appraised value.

I could throw in a couple other clauses in there to take care of people "brokering" regular sales to straw buyer or about requiring disclosures that recommend sellers consult with family and/or homeowner advocacy group within the 30 day cooling off period, but that is the crux of it.

This wouldn't eliminate the industry, but it would limit the actions of the worst offenders. Offers dramatically below market value should get counters. The worst consequence seems like it would be that the seller will get absolutely swarmed by realtors trying to convince them how much more money they would get with them.