Del. Glenn Oder’s work to shut down the payday lending industry will eliminate short-term loan options for many Virginians. Oder ignores the increasing number of constituents and hardworking consumers who are struggling to gain access to credit in today’s economy (”Newport News candidates square off,” May 1).
Contrary to Oder’s claims, a Dartmouth College study found that a 2007 ban on payday lending in Oregon hurt borrowers, forcing them to turn to more expensive alternatives, such as bounced checks, overdrafts and credit card cash advances.
A New York Times Magazine article last year noted that payday loans are a valuable financial tool, offering easy-to-understand conditions, with “no surprises, no hidden fees,” unlike many banks (who are not demonized by elitist politicians, despite their hidden fees).
Shutting down the short-term payday loan industry only forces these borrowers to resort to less desirable alternatives to make ends meet.