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Poll: Do Payday Loans Serve A Need Or Exploit The Poor?

Critics say check-cashing stores make "payday loans" at exorbitant interest rates. The industry wants to boost its lending limit. Critics want tougher regulation. Your views?

On the 1st and 15th of every month, people line up inside the check cashing stores at the south end of San Leandro along East 14th Street.

The stores serve people who don't have bank accounts.

Some people simply pay a fee to cash paychecks.

Others take cash advances of up to $300 at interest rates that can become astronomical if the borrower fails to repay promptly.

A decade ago a San Francisco Chronicle article likened the so-called payday loan industry to "legalized loan-sharking."

Last month, the San Jose Mercury reported that payday lenders are trying to boost their lending limit from $300 to $500 and making campaign contributions to further their legislation.

Outside a check cashing store near Bay Fair Center, Charlotte Whitaker said she paid a $20 fee to cash her $840 Social Security disability check because she didn't have a bank account.

"But I never borrow money because I know I couldn't pay it back," she said.

Another woman, who identified herself as Val, said she had borrowed and gladly paid the interest.

"When you need it, it's a blessing," she said, adding, "Banks ain't gonna give it to you."

What do you think about payday lenders? Tell us in the comments and vote in the poll.

Maria Stokes December 01, 2011 at 04:40 PM
This just out: "Payday lenders face tough restrictions in East Palo Alto" http://tinyurl.com/7qrhphp Are these restrictions tough enough?
Payday Loan April 25, 2012 at 11:04 AM
Superb quality content. The payday loans discussion is quite better and is effective http://www.instantloansneed.co.uk/payday-loans/
Chris Gibbons July 20, 2012 at 04:24 PM
They are a good financial tool
Alan Hazlett July 20, 2012 at 04:32 PM
Payday loans have a place in todays lending arena. Many, Many people cant get a credit card or a small loan from banks so they need some money to get them through until next payday. Given the risks they take the fees they charge is ok.
Dave Vajda July 20, 2012 at 05:07 PM
Payday Loans are a great, short-term tool to handle unexpected costs. Compared to bounced-check fees and late fees for rent payments, payday loans are far cheaper and have far less hassle than trying to get a loan from the bank. (Have you tried to borrow $300 from a bank?) Bank fees on personal loans start at $125 and the minimum you can borrow is $1500 or more. Payday loans just make a lot more sense to most people.

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