{i wanted to upvote you. I might have accidetally downvoted you. Sorry!}
Doesn't the US have credit unions or savings clubs and co-ops and so on?
These are ways for financially excluded people to save and to borrow money at reasonable rates.
Other ways payday lending can be improved is to have an association that has some rules: do not allow people to extend a loan; do not allow people to get a loan to pay pff another payday loan (both of these cause spiralling debt); check people are competant to get debt; etc.
Better information about he costs would be useful. APR gives very high numbers for payday debts, so they need to be able to give the APR as well as give sensible realistic repay rates and the costs involved.
There's probably an app in here somewhere to help people budget. You work out when their money comes in. Yu get them to photograph all their receipts and bills, and ask them to document all their outgoings, and give them advice about where to save.
>There's probably an app in here somewhere to help people budget. You work out when their money comes in. Yu get them to photograph all their receipts and bills, and ask them to document all their outgoings, and give them advice about where to save.
This seems to play off a misconception about the poor and household finances: that the poor have trouble putting aside money for saving, or are incapable of proper budgeting.
In my experience, the problem is not expenditures, it's income. Even working 2-3 jobs, poor people don't have enough money to pay for the barest of necessities -- things like rent, food, medicine, clothes[1]. So they have to make a choice between necessities. Payday lending companies make things even worse by charging extravagant interest rates that far exceed what is required to cover the risk of default.
>Other ways payday lending can be improved is to have an association that has some rules.
I don't quite understand this one. Can you describe what you mean by an "association"? You mean like a union?
In any case, I'd hesitate to add any more rules to a sector already greatly harmed by too many of them.
RESPONSE TO danbc: oh, ok. I thought you were talking about an association for the loan recipients, and couldn't quite understand. But yes, I think an industry association with teeth would be a great thing. But right now, there's little incentive among the current scummy incumbents to create an effective self-regulating association (there is one already in the US, but it's basically name only with no teeth, and primarily exists to lobby and do PR for its members).
1.The highly-publicized incidents of teenagers wearing $150 shoes are mostly the result of side income that the teenager is bringing in, which is typically hotly contested by the child's parent(s) (but they're not the ones who get the check).
About the "association" - I mean this to be like a teDe body that has a badge and rules for membership. This is informal voluntary regulation to avoid government implementing legal regulation.
Something similar to plumbers or gas fitters?
About budgeting: I tend to agree tha. People are not wasteful or extravegant. The UK is thinking about changing benefit payments from fortnightly to monthly. In the trial areas many people are having problems with debt. And once poor people get into debt it's hard for them to escape. So budgeting isn't meant to suggest that they are wasteful, just not used to budgeting "money in a bank" rather than actual cash. Older budgeting methods - envelopes on a shelf labled for all the bills - don't work when the cash to fill those envelopes is in a bank.
I think the concept of "nudge" comes in here. It sounds easy to say "just take the cash out of the bank and fill the envelopes" but people don't and so understanding why people struggle to budget and helping them do better is I think useful.
Doesn't the US have credit unions or savings clubs and co-ops and so on?
These are ways for financially excluded people to save and to borrow money at reasonable rates.
Other ways payday lending can be improved is to have an association that has some rules: do not allow people to extend a loan; do not allow people to get a loan to pay pff another payday loan (both of these cause spiralling debt); check people are competant to get debt; etc.
Better information about he costs would be useful. APR gives very high numbers for payday debts, so they need to be able to give the APR as well as give sensible realistic repay rates and the costs involved.
There's probably an app in here somewhere to help people budget. You work out when their money comes in. Yu get them to photograph all their receipts and bills, and ask them to document all their outgoings, and give them advice about where to save.