No more inaccurate that an entire class or group of people (in this case, payday loan borrowers) "has no choice" except to do something or other.
Edit: Lol wait, so you admit you don't even consider your own statement accurate. What are we doing here?
It's a statement that is true for the most part, although there are a few specific contradictory cases. Please don't fall prey to the popular liberal tripe about poor people being stupid, helpless, or unaware of their options. They live in a very different kind of economy and the decisions they make frequently make a lot of sense given the context.
To answer your question: what we are about to start doing is quibbling over semantics. It'll bore both of us if we do.
The material challenges of poverty, now exactly the same as assuming everyone is enlightened about their options. Also, we landed on Jupiter - news at 11.
Umm, not quite. Payday loan users aren't universally poor or uneducated. That's a common misconception. A lot of the time they're just starting a new job and awaiting that first paycheck. Borrowers include judges, members of the serving military, and plenty of other individuals who for whatever reason do not wish to go through a more formal loan process. Or who don't have time.
Likewise, poor people aren't universally stupid or uninformed. I'm going to do you the courtesy of assuming you don't actually believe such a thing. It takes savvy to navigate the working-poor economy. If you want a good fish-out-of-water story about a middle-class person trying to get buy in a working-poor economy, read Barb Ehrenrich's "Nickled And Dimed". While I don't agree with all her conclusions, she does a great job of illustrating how a lot of mainstream assumptions about shopping, spending, and what constitutes a "good" buy don't fit the working-poor economy.
People who are bad at evaluating all manner of options have protections to minimize how much they're fleeced. The point of having inalienable rights is that no, not even you should be able to sign them all away, because it's not good for the society to allow that much advantage to be taken of its citizens, even if they consent to it. Payday loans deserve that level of protection (a total ban).
Only when it comes to extremely high-risk investment options. When it comes to borrowing options, the law doesn't actually require as much protection for the borrower. Such protections as are in place such as minimum income requirements are sadly mostly for the lender's benefit, unless voters clobber legislators until they rein in the lenders.
I don't favor a total ban on payday or title loans or on pawn shops (which is how people without a job get loans). It looks like you and I will have to disagree on that since I see reason to believe they provide a valuable service and you don't. But I do like legislation that requires disclosure of all terms, caps the interest at no more than 200% per annum, provides the right to make partial payments, forbids penalties for paying off a loan early, and limits the number of rollover renewals. I also like having a legal path to short-term loan options because I don't like the idea of steering people to loan sharks who operate in an almost completely unregulated environment.
There is no meat in an argument that escaping possible overdraft fees might be done by paying enormous and certain interest instead.
There is, because the amount being borrowed is so low that even a truly exorbitant rate of interest doesn't work out to a dollar figure high enough to make the customer balk. The interest and fees are still lower than the financial consequences of pursuing some other option.
A $20 charge to borrow $200, receive it in less than an hour, and pay it back in a month is far better than even one $25 overdraft fee due to a bounced check, or an eviction begun or a vehicle repossessed while waiting for the bank loan to be approved or the credit card to arrive in the mail.
People seldom use pawnshops or payday/title loan companies for grins and giggles; it's only after conventional sources of slack have been exhausted.
Actually, the entire subprime mortgage crisis was caused by bankers doing just that: intentionally lending money to people who were bad credit risks due in part to their income-to-bills ratio.
So which is it? Banks won't lend to them and they need payday loans they can't afford, or banks will lend to them (making payday loans completely unnecessary)?
Banks can and will lend to them especially if they have assets such as equity in a family home or even a vehicle. However the loan products banks offer are seldom good in an emergency. A mortgage, even a subprime one, requires an application process lasting days or weeks. Credit cards typically arrive in the mail in three to five business days. That won't help a person who needs money immediately. Furthermore, unlike banks title and payday lenders are open until 6 and 7 PM and frequently on Sundays. It's physically possible to get in and do business without taking time off from a 9-to-5 job.
Subprime lending did happen wholesale, and it helped cause a major global financial disaster. Some steps were taken to prevent it from happening again. You would prefer more of it?
Most of the steps, unfortunately, didn't create much hardship for the affluent investment bankers but it made it much more difficult for poorer people to buy a home. While I'm not in the homebuying-is-for-everyone camp I can't help but notice how many people have benefited from gradual accrual of home equity particularly as they approach retirement. Having somewhere to live in old age really does make a difference in a person's quality of life and it also creates a means to pass wealth on to the next generation. Charities such as Habitat for Humanity recognized this a long time ago and have identified home ownership as a key way to help individual families exit generational poverty.
The global financial disaster was caused by a perfect storm involving sizable loans to high-risk borrowers, and mass securitization of those loans which were then marketed as being substantially more reliable than they really were. Although some of the high-risk borrowers did indeed default, the majority did not. For most of them, the "liar's loans" and the subprime mortgages worked as intended. Those borrowers knew exactly what they were doing and accomplished precisely what they set out to do.
I'm not a fan of lying on loan applications especially when it's not the borrower doing it but the mortgage broker. I don't object to regulations requiring more transparency and cracking down on dishonest lending, and I'm quite bummed out about the gradual weakening of the Glass-Steagall Act intended to deter banks from creating a conflict of interest by investing significantly in securities on their own behalf. That, I believe, caused more harm than simply lending to poor people.