Ask Robert Reich: Loansharking Is Good for Tennessee
Due to the weird nature of The Tennessean’s Opinion pages – where multiple people opine on the same subject each day – reading can often be an exercise in repetitiveness. But the strategy also has a built-in mirth factor: The guest columnist who is summoned to defend the indefensible.
It’s usually a business guy, better known as a “biz pig” in the genteel lexicon of my Pith colleagues. He’s charged with navigating the landmines that are his stock and trade, convincing lay readers that it’s in their best interest that he make a whole lotta money.
But yesterday, Robert Reich created a new benchmark. He’s the president of Tennessee Title Loans, and he was charged with defending his allies in the title loan and payday lending trades, formerly known as The Loanshark Industry. By the miracle of lenient government – Motto: We Last Cared About Consumers in 1983 – Reich can legally charge his customers 264 percent in interest and fees annually.
Sadly, governments nationwide have come to consider this an unswell deal for the earnest consumer. So some state legislators are thinking crackdown, including our fine leaders here in Tennessee.
This, of course, does not make Robert Reich happy. Which is quite natural, since Robert Reich gets to run a legal loanshark business without the usual felonious concerns tying down his collections division. You’d be pissed too.
It all leads to an exquisite dance, in which Robert argues that loansharking is good for us:
See Robert worry about his poor customers, 80 percent of whom don’t have credit cards. See Robert bemoan the conventional lending industry, which refuses to cater to broke, desperate people with bad credit. See Robert assert that if he can’t take advantage of said people and make them more broke and desperate, earth as we know it will fall from its axis.
It’s a beautiful moment of disingenuousness, courtesy of our friends at The Tennessean.
Comments
For an organization that constantly rags on The Tennessean for being a rag, y'all sure do read it a lot to come up with items for this blog.
Posted 08/12/2008 at 07:27:34 PMSadly, many Christian groups focus so much of their time and attention when the Bible has about 500 times as much to say concerning practices such as Mr. Reich's that are designed to prey on the poor.
Posted 08/12/2008 at 09:09:11 PMBoth of these posts are odd.
What does Christianity, or why did you bring it up, have to do with loan sharks ripping people off? Was that why Jesus got so angry in The Temple? I remember that story.
It's just a predatory industry preying on poor and undereducated/premedicated people which are not always the same. Was that true back then too? Does history repeat itself?
Posted 08/12/2008 at 10:25:02 PMShark:
I brought it up because I find it odd that predatory lending has not become an issue on which Christian churches (or Jewish synagogues, for that matter) are speaking out against.
Homosexuality, which I mentioned because it has become THE social issue for many Christian groups, is referenced only about 7 times, tops, in the Bible (and a couple of those are fairly indirect or oblique).
By contrast, the issue of predation on the poor is referenced literally hundreds of times, going back to Torah and running through the prophets, who denounced those who would "take a needy person's cloak in pledge" or who would "sell the poor for a pair of sandals." Under the law of Moses, society's obligation was to ensure that the poor were taken care of, not taken advantage of.
Posted 08/12/2008 at 11:17:30 PMUnfortunately, Tennessee has a long history of these type of questionable character. It is one of our weaknesses as a city and a state that we do not deal decisively with these people.
Posted 08/12/2008 at 11:49:45 PMMr. Reich is the perfect picture of the term "loanshark". Maybe he should go into acting.
Posted 08/13/2008 at 09:09:37 AMDoes anyone but me find it interesting that the target group for these predatory loans would seem to be people who for the most part would be making lease and/or stretch payments on an auto rather than having a full paid car and the title in hand?
Posted 08/13/2008 at 10:33:22 AMTitle loan companies do not loan money to poor people. To get a title loan you must have equity in the vehicle (i.e. a clear title) and a verifiable job.
If you take away this credit option, consumers will either pay higher bank fees (NSF fees), use pawn shops which take possession of the car or utilize online unregulated lenders.
Instead of simply saying they "rip off poor people", maybe you all should check your facts and learn the truth about title lending. It often saves consumers money because they can avoid bouncing checks or paying late charges to credit cards and utilities (both of which end up being much higher fees)
Posted 08/13/2008 at 01:26:41 PM