Julian-David M. Smith
Gov 2306
31004
10/4/14
Payday Loans
One of the biggest problems in Texas is also one of the least talked about. The problem is payday loans and how they are getting out of control. The business behind payday loans is sketchy in itself. In some instances if a person takes out a loan they have to pay back they might have to pay up to 500% in interest from what they took out. This forces the person who took out the loan to sell some of their belongings just to pay back their debt. Some payday loan companies even allow people to get another loan to pay back the one that they currently have. This throws people into a cycle of debt which is extremely difficult to escape. Even though people are thrown back into it isn’t entirely the companies fault since people don’t have to take out payday loans. The reason that people do takeout payday loans is because the people who take out payday loans have either the choice of bank overdraft fees, criminal loan sharks or pawning their possessions.(Texas New Payday regulations pg.4). The main problem with payday loans is that it is a very loosely regulated market. The payday loan industry tries to avoid regulations instead of submitting to them. (Texas New Payday regulations 6). Because it has become a loosely regulated industry, the payday loan companies can continue to prey on people who are in deep economic situations and get away with it. The people most affected by payday loans are the ones who take them and their families. The...