California regulates payday loans (good thing, since Trump's about to kill the federal rules preventing payday loansharking), but not "installment loans" of $2,500 to $5,000 and that means that out-of-state lenders are able to target desperate Californians; they're getting seven-year loans of $5,000 that cost $42,000 to repay.
The underwriters for these loans are ignoring all kinds of warning bells, like borrowers who claim $2700 in monthly income and $0 in monthly expenses.
The borrowing is being driven by the usual culprits: wage stagnation, insecure gig-economy work, and an unwillingness by banks to offer credit to poor people, along with skyrocketing costs in health-care and housing.
Three lenders account for nearly all of these predatory loans: LoanMe (based in Anaheim), Check ‘n Go (Cincinnati) and Elevate Credit (Ft Worth); they spend millions advertising in California; and vast sums lobbying against any attempt to close the "installment loan" loophole and regulate these like payday loans and other loans targeted at the poorest, most precarious people.
As the Marine Corps veteran waited for approval for a special pension from the Department of Veterans Affairs, she racked up debt with a series of increasingly pricey online loans.
In May 2015, the Rancho Santa Margarita resident borrowed $5,125 from Anaheim lender LoanMe at the eye-popping annual interest rate of 116%. The following month, she borrowed $2,501 from Ohio firm Cash Central at an even higher APR: 183%.
“I don’t consider myself a dumb person,” said Hesson, 68. “I knew the rates were high, but I did it out of desperation.”
Borrow $5,000, repay $42,000 — How super high-interest loans have boomed in California [Andrew Khouri and James Rufus Koren/LA Times]
(via Naked Capitalism)
Gaggle is one of a handful of creepy companies that sell surveillance software to school districts, which monitor every keystroke and click on school networks -- they're the latest evolution in spy-on-kids tech, which started off by promising that they'd stop kids from seeing porn, then promised they could end bullying, and now advertise themselves […]
Hirevue is an "AI" company that companies contract with to screen job applicants: it conducts an hour-long videoconference session with applicants, analyzing their facial expressions, word-choices and other factors (the company does not actually explain what these are, nor have they ever subjected their system to independent scrutiny) and makes recommendations about who should get […]
Kaja Robinson is 53 and has a daughter about to go off to college, but she is still embroiled in bizarre, kafkaesque disputes over the $17,000 student loan she took out in the 1980s: for decades, she has had to set aside whole days to call debt collectors and try to get them to acknowledge […]
If you’re just jumping into app development for Apple’s devices, you’ve picked a heady time. The new iOS 13 has a ton of new features: A versatile SwiftUI language, a boosted role for Siri and a more robust Photos app, just to name a few. And if you’re making the transition from iOS 12? Get […]
Most people don’t spare a lot of thought on the potting for their plants. Perhaps something with a color that matches the walls, but that’s as far as it goes. After all, the plants don’t care what they’re wearing. Do they? Actually, they might. As eye-catching as the AIRSAI Floating Bonsai Plant Pot is, its […]
With the gains real estate has made over stocks in the past 25 years, it’s easy to see why the rich constantly use it to expand their wealth. What’s slightly less obvious is why only the rich seem to ever break into real estate investment. There are a lot of reasons, but a couple of […]