Newspaper Editorial Boards Like The PayDay Lender Bill

Back when Georgia banned pay day lending, it became the only state to do so. Every other state has some variation of the financial institutions that allow people to take short term loans based on their paychecks — advances on their paychecks, if you will.

Consequently, Georgians who have that opportunity are now crossing state lines — Columbus, Augusta, Rome, Atlanta, Savannah, and other areas near state lines are seeing residents cross state lines for quickie pay day loans. Business is booming right inside the Florida, Alabama, and South Carolina lines. And in Macon and other areas, pawn shops are doing well.

It’s not a surprise. The state cut off a business that had demand and forced residents to go either out of state or to even riskier enterprises (no data was available on loan sharks, other data is anecdotal based on my googling and making lots of phone calls). The free market is an amazing thing. New and novel ways of accomplishing what had once been allowed started growing.

Now the state is thinking of allowing payday lenders back, but with much tighter regulations than previously existed — tighter than most other states. Consumer advocates, the industrial loan groups, etc. are crying about how this will screw people. I find it interesting that several editorial boards in the state, from the decidedly liberal Macon Telegraph to the papers in Rome and Albany, disagree with the consumer advocates and have instead come out in favor of passage of the payday lender bill. The AJC, on the other hand, has come out against the bill, which is just another sign that the bill is worth passing.

I think there is no way to stop people from getting payday loans. They will go where they can to get the money they think they need. The irony is that the consumer groups who favored ending the old law wound up with the law of unintended consequences biting consumers on the ass. It’s time to correct the problem and introduce a more regulated scheme of payday lending, instead of an outright ban.

Technorati Tags: Payday lending


  1. jaymore says:

    As is frequently the case, when government steps in to “protect” its citizens, more harm than good is done. The payday industry has long been misunderstood and maligned by those who have something to gain from its demise. Some research into the issue, more often than not, will bring a clarity that lurches towards enlightenment.

  2. atlantaman says:

    You’re right about the free market. The loans are very high risk and many companies refuse to even enter the market.

    I find it ironic that the payday lending industry is being villified, while the Suntrusts, Bank Americas and Wachovias are getting off scot free. Shouldn’t that trio of banks be classified as the evil ones? They are the group that has chosen to completely shut out a class of people from the process. God forbid a black person, a latino or a white trash redneck track dirt on their marble floors.

  3. eehrhart says:

    I just could not let an op-ed by Walters go without a comment. Jim Walters is the largest hypocrite in the state with respect to this bill. His entire reason for opposition is because he as a GILA lender does not want the competition. If you want to see the true predators look at his GILA lending and how they loan money and how they collect. Further hypocrisy is that he and his brother do payday loans in other states.

    Well respected? I do not think so!

    I do understand that he is about to be the recipient of an ethics complaint for lobbying without registering. This is a blatant flauting of the law and should not be tolerated by someone who is chair of the state DNR board.

  4. ugadog says:


    I was recently at a presentation by the lobbyist for payday loans. He stated that 5% of his loans are defaulted on. That does not seem that risky too me.

  5. mel says:

    Who is providing the information showing that there is a “demand” for this service? Is it citizens complaining that they can’t get loans? No, this information is coming from the payday lenders themselves. The representative sponsoring the bill has said that it was not one of his constituents who asked him to write this legislation, rather it was a lobbyist for the payday loan industry.
    Money talks….especially when you want legislation passed!

  6. Joy says:

    There is a simple way to check the “demand” level for payday loan services, and it was mentioned above.

    “Business is booming right inside the Florida, Alabama, and South Carolina lines.”

    Can’t believe I’m going to cheer for this particular industry, or for a lobbyist… but good for the loan companies in hiring someone to speak for their customers.

  7. atlantaman says:

    Simple Econ 101 is going to answer a few of the statements made on this topic.

    1. If the folks getting the loans were not high risk then Wachovia, Bank of America and Suntrust would be lining up to give them loans at the prime rate.

    2. If there is no demand for the loans then who cares if they are legal? Without the demand, nobody would buy the product and the finance companies would quit offering the payday loans.

  8. Doug Deal says:

    I am with Erick.

    As a free society, we constantly allow things that are distastful, it is the price of freedom. Instead of making them illegal, how about challenging the people who own these establishments when you pass them on the street orwhen they join your civic organization, and refuse to do business with them in any business persuit in which they engage?

    Instead of taking away someone else’s freedom, excercise your own.

  9. bradwell says:

    You’ll find a lot of these places do contribute to the communities they are in. Nowadays it’s a matter of fact that embattled corporations have foundations or contribute in some way to prove themselves to the community.

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