“The rich rules over the poor, And the borrower becomes the lender’s slave.” (Proverbs 22:7)
It’s hard to imagine a more predatory practice than payday lenders, with desperate poor people charged an effective 390% annual interest rate — in many states legally and unregulated.
It’s easy to get in debt and often very hard to get out. This is especially true if you live on the edge of poverty. People on the edge of poverty have very little room for an unexpected expense. So, what do they do when one inevitably occurs? Many turn to payday lenders. And in doing so, they often make their poverty worse.
Here’s how it works. A payday lender offers to lend a single mother, say, $500 to help pay for an unexpected expense, like a car repair. He offers a simple deal—repay the loan in two weeks with…
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