Can You Really Use One of those Payday Loans?

The question is: Who loves you baby? Before you automatically jump aboard the[s anti-business bandwagon, ask yourself “Do the people that oppose payday lenders understand, or care, that sometimes people come up short for money and need a little help? Should Blacks be up-in-arms about the financial realities of borrowing at high rates? Black politicians, community activists and pastors spout misleading rhetoric and biblical teachings against this industry and falsely accuse this industry of having a long history of exploiting African Americans. The lending industry’s opponents ridicule it as being “an immoral, unethical, abusive process,” In the interest of blacks evolving business mindsets its necessary that we remind these self-appointed reformers that their anti-commerce efforts are well-meaning but unrealistic interferences.

Who is it that says: the payday loan industry is “fleecing the poor”? While Black Americans’ leadership class has a tendency to ridicule their profession, but businesses in this segment provide fast cash and no credit checks. They are more our friends than forces about to save us from ourselves. Anti-commerce forces have been pushing new rules hurt the Payday Loan industry. Regulation being pushed by these reformers will stymie revenues in the $6 billion payday loan industry and block growth.

The other side of the story is represented by Florida Rep. Alcee Hastings. The Black Congressman from Miami admits to being “one of us” ad has used payday loans.

Representative Hastings. has not only used loan services but wrote a letter to the Consumer Financial Protection Bureau (CFPB) expressing concern about efforts to regulate the industry.. Hastings wrote an op-ed in the Washington Examiner in support of the industry.

The payday lenders are pure fodder for the nations’ politicians.. State legislatures across the country are taking steps to regulate payday loans. Fifteen states and the District of Columbia have either capped rates leading to payday lenders shutting their doors or banned them outright.

Blacks represent a quarter of “payday loan customers”. Under Trump appointee Mick Mulvaney, the CFPB is making it easier for predatory lenders. In a year in which the industry has gone from villain to victor, the result of a concentrated lobbying campaign that has culminated in the Trump administration’s loosening regulatory grip on payday lenders and a far friendlier approach by the industry’s nemesis, the Consumer Financial Protection Bureau.
Payday industry foes liken the industry to structural racism against Black consumers.

Revenues for the payday loan industry will shrink under a new U.S. rule restricting lenders’ ability to profit from high-interest, short-term loans,. The current business model relies on borrowers needing to refinance or roll over existing loans. Under the new rule, the industry’s revenue will plummet by two-thirds. The long-anticipated rule must survive two major challenges before becoming effective in 2019. Republican lawmakers, who often say CFPB regulations are too onerous, want to nullify it in Congress, and the industry has already threatened lawsuits.

The payday lending firm provide needed, short-term service to the working poor. Taking away their access to these lines of credit means many Americans will be left with no choice but to turn to the unregulated loan industry, while others will simply bounce checks and suffer under the burden of greater debt.

New rulings may devastate an industry serving nearly 30 million customers annually. But, instead of working toward the determent of this legal and rewarding industry, there are opportunities for Blacks in this business. A payday loan franchise requires about $215,000 to open. Check cashing, payday and auto title loans, faxing and internet services,, money orders and transfers and notary services are businesses Blacks can pursue and prosper in.

William Reed is publisher of “Who’s Who in Black Corporate America”