Worshiping the Market God in The "You're on Your Own Ship Society"

Chuck Sheketoff

The true believers may have reached a new low in their worship of the market god and pursuit of the "You're on Your Own Ship" Society. Here's how they twist ("spin" would be too kind) an effort to add a small degree of consumer protection to the payday lending spree.

According to the Oregon Republican Party's "ORP UPDATE" for the week of May 30th through June 3rd, "Senate D’s Support Increase in Interest Rates for Payday Loans!"

Apparently, the Oregon GOP wants Oregonians to ignore the fact that before the Senate action there was NO limit on payday loan interest in Oregon. This is the grand way the Republican Party explained their headline:

Democrats in the Senate are supporting a 391% interest rate fir (sic) payday loans. On May 31st Democrats in the Senate decided to attack businesses that provide short-term loans to workers in need who may not make it until their next payday. Senator Roger Beyer (R-Molalla) stated, “We should be letting the market determine these rates, not the legislature.” Business throughout Oregon offer short-term payday loans to help Oregonians with unexpected expenses that come up in between paydays, and SB 545 will these (sic) Oregon workers suffer.

Simultaneously, Representative Dennis Richardson wrote in his weekly newsletter this revisionist history and explanation:

From the Senate Republican Office: Majority Dems Support 391% Interest Rate for Payday Loans

When Democrat Governor Neil Goldschmidt removed interest rate caps to attract businesses to Oregon in 1987, few would have guessed that Senate Democrats would circle 18 years later and set caps at 391% APR. Today, Democrats in the Senate chose to reinstate those caps and attack businesses that provide short-term loans to cash strapped workers until their next payday.

“Those that voted for this measure have brought interest rate caps back to Oregon. Their votes tell us that while 392% is too high, the 391% proposed by this bill is acceptable,” stated Senator Roger Beyer (R-Molalla). “We should be letting the market determine these rates, not the legislature.”

In the past, lenders in Oregon were limited in the interest rates they could charge. The lack of these limits, known as usury, was used by then Governor Neil Goldschmidt to attract a major credit card company to Oregon in the late 1980’s. The passage of Senate Bill 545 reinstates these limits for the payday lending industry.

“This bill sounds good on the surface but has the unintended consequence of creating a state sanctioned 391% interest rate,” stated Senator Jackie Winters (R-Salem). “This bill puts the state seal of approval on this rate and forever enshrines it in statute.”

Businesses throughout the state offer short-term payday loans to help Oregonians with unexpected expenses that come up between paydays. Borrowers are often high risk and traditional lenders are not an option.

And then this week the Right-wing echo chamber and cheerleaders for the worship to the market god, Cascade Policy Institute, issued a statement entitled "Who's Asking for Payday Loan Reform?" (I'd provide a link, but their website, ironically, is not too quick to post their "QuickPoint!" commentaries). They claim,

if customers actually felt threatened by the loan industry, they'd stop doing business with them. In fact, there has been very little demand by payday loan customers for additional regulation because they are, for the most part, satisfied with the status quo. The push for regulation comes from intellectual elites, such as editorial writers, who think they know how to run other people's lives.

After suggesting that the cap on interest rates would lead to "higher prices for services," they argue "Payday lenders are providing an important service. They and their customers should be left alone."

Oregon has more payday loan shops than McDonald's with an economy that has super-sized the payday loan industry. Under the free marketeers' "you're on your own ship" philosophy, the government should stop regulating the food industry with health standard inspections. Ah, let them choose to eat tainted beef...

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    I'm clear that you're a true advocate for protecting the consumers that are forced by circumstances to patronize these bottom feeders, and I'm clear on the Republicans' and the Cascade Policy Institute's usual pleading, but what was the substance of the bill itself?

    Can you offer us a link on that? Did a bunch of D senators vote to retain a 390% interest rate? I assume that this is some sort of mathematical gymnastics on the part of the spinners involving a $200 loan amortized over 30 years or something like that...

    I did go to look at the bill, but it gave me a hadeache before I got through all of the changes and stuffing and stuff.

    I think that it'd be so much fun if they'd just set an APR cap and be done with it......(Maybe that's what they did and I'm not getting it).

  • Tom Civiletti (unverified)

    Most states have interest caps on some types of loans. Credit card rate limits are an example. Because of them, consumers in many states pay substantially lower interest than Oregonians. Although I don't have data, I believe the difference would amount to several tens of million dollars annualy leaving Oregon as additional interest payments. This cannot be good for Oregon's economy and is certainly not good for debt-ridden Oregonians.

    The payday loan situation is scandalous. I predict that within a few years free market worshippers will be arguing for the right to sign ones self into indentured servitude.

  • Joe Smuckatelly (unverified)

    Why don't yoy people grow up, the only people complaining are a bunch of f_cking democrats who dont live in the real world, pay day lenders would not be there if they were not needed if your so freaking worried about people in this chickin _hit state why not let business thrive.

  • Ed Bickford (unverified)

    What a sickening idea of "the real world" J. S. expounds! There, allowing business to thrive means allowing bottom-feeders like high-interest payday loan-sharks to exploit desperate people without limit! Who would agree to live there? We can easily avoid it. His is a real crappy world, and he's welcome to it.

  • Tom Civiletti (unverified)

    Hey Joe,

    And meth dealers and child prostitutors would not be there if they weren't needed either, eh?

    Some businesses should not thrive, I think.

  • DA (unverified)

    J.S. is a crack head, and he's afraid they'll put limits on his dealer next.

    "let business thrive" is a pretty funny line coming from someone using iWon.com for e-mail.

    Republican'ts are morons.

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