Sunday, February 18, 2018
Editorials

Editorial: Rein in legalized loan sharking

Payday loans are short-term loans with triple-digit interest rates made to cash-strapped borrowers regardless of their ability to repay. It's a debt trap now practiced by a handful of big banks, including Wells Fargo Bank, U.S. Bank, Regions Bank, Bank of Oklahoma, Guaranty Bank and Fifth Third Bank. These institutions have decided that profits from what amounts to legal usury is worth the cost to their reputation. But federal regulators don't have to agree. Both they and Florida lawmakers need to step in to rein in all the state's payday lenders.

People generally know of payday lending through storefront operations. Florida has over 1,300 of them. Bank payday lending operates in essentially the same fashion. Borrowers have a checking or savings account at the bank, and when they need money to fix a car or for some other emergency expense they borrow $100 — a typical amount —as an advance on their next direct deposit to their account. Banks then pay themselves back plus high interest and fees after the borrower's next paycheck, disability check or Social Security check is automatically deposited. If the borrower doesn't have enough in their account to cover the full loan, the withdrawal is made anyway and overdraft fees may start piling up.

What most often happens is that after that debt is paid, borrowers frequently take out another loan, leading to a cycle of shouldering new loans. According to a report by the Center for Responsible Lending, the median payday borrower took out at least 13 loans in 2011 and over a third of borrowers took out more than 20. These loans carry annual interest rates that average from 225 to 300 percent for a typical loan term of 12 days.

Churning loans is considered the crux of the business model. In Florida, over 60 percent of payday revenue is generated from borrowers who take out 12 or more loans per year, according to a 2010 report prepared for the state Office of Financial Regulation.

In 2000, Florida put an end to triple-digit interest rates on car title loans where lenders would hold the borrower's car title as collateral. State law caps car title loan interest charges at 30 percent annually. But no similar consumer protection exists for payday loans. A 2001 payday loan measure authorized the industry to charge a maximum annual rate of 391 percent on a $100 loan for a 14-day period. Were Florida lawmakers to end payday loans in the state, it would save $250 million in predatory loan fees every year, according to the state report.

Other states have barred payday lending entirely or capped the interest rate at 36 percent. In 2006, the Military Lending Act was passed to protect active-duty military and their families from being financially exploited by payday lenders, limiting loans to a 36 percent maximum annual interest rate. But large banks can get around these federal and state consumer protections, and will continue to do so as long as the practice is lucrative and legal.

Federal banking regulators and the Consumer Financial Protection Bureau have the authority to shut down this practice. Florida lawmakers can do so at the state level. It speaks to the political power of the industry that so little action has been taken to eliminate debt-trap products that harm so many low-income Americans.

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Editorial: Trumpís rising deficits and misplaced priorities

Editorial: Trumpís rising deficits and misplaced priorities

Itís not popular in Washington or virtually anywhere else these days to express concern about the rising federal deficit. Congressional Republicans who used to be deficit hawks first voted to cut taxes by $1.5 trillion over the next decade, then rais...
Published: 02/17/18
Editorial: Buckhorn should not appeal verdict in firefighterís case

Editorial: Buckhorn should not appeal verdict in firefighterís case

The city of Tampa should have taken Tanja Vidovic seriously from the start when the Tampa firefighter complained about her treatment in the workplace. Now that a jury and judge have spoken, itís time for City Hall to cut its losses, learn from its mi...
Published: 02/15/18
Updated: 02/16/18
Editorial: CareerSource troubles mount as public trust drops

Editorial: CareerSource troubles mount as public trust drops

The dark cloud enveloping Tampa Bayís job placement centers keeps growing. There are accusations of forged documents, evidence of nepotism and concerns about grossly inflated performance numbers that could be tied to receiving more public money and b...
Published: 02/15/18
Updated: 02/16/18
Editorials: Prayers and platitudes after shootings arenít enough

Editorials: Prayers and platitudes after shootings arenít enough

Even before the victims of another mass shooting at another public school were identified, Gov. Rick Scott, Attorney General Pam Bondi, state legislators and members of Congress rushed to South Florida or to social media to offer their thoughts and p...
Published: 02/15/18
Editorial: DCF review should get to the bottom of Hillsborough foster care issues

Editorial: DCF review should get to the bottom of Hillsborough foster care issues

The Florida Department of Children and Families is right to call for a timely and "comprehensive" review of Hillsborough Countyís foster care system. Though the probe is a reaction to a recent case involving a child who was left unattended, the revie...
Published: 02/14/18

A Washington Post editorial: Modernize 911 calling before it becomes an emergency

This Friday marks the 50th anniversary of the first 911 emergency call placed in the United States. Since then, uncounted lives have been saved and people helped. It has been a great accomplishment of government.But even as an estimated 240 million 9...
Published: 02/13/18
Updated: 02/14/18
Editorial: Scott, Cabinet cannot be trusted on felonsí voting rights

Editorial: Scott, Cabinet cannot be trusted on felonsí voting rights

Gov. Rick Scott always has been grudging and imperious about restoring the voting rights of felons, requiring them to wait for years before begging the governor and Cabinet to be recognized again as citizens. That arrogance is on full display in a le...
Published: 02/13/18
Another voice: ĎDreamersí donít know whom to trust on immigration

Another voice: ĎDreamersí donít know whom to trust on immigration

Immigrants brought into this country illegally as children by their parents may be wondering whom to trust. The political theater being played out in Washington hasnít settled the status of either the "Dreamers" or the estimated 11 million other undo...
Published: 02/13/18
Editorial: Promising Tampa stadium site for Rays

Editorial: Promising Tampa stadium site for Rays

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Published: 02/09/18
Editorial: Senate should reject Houseís attack on public schools

Editorial: Senate should reject Houseís attack on public schools

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Published: 02/08/18
Updated: 02/13/18