Illinois Senator Dick Durbin is Wants a 36% Cap

If the government capped mortage rates at 5%, how many people would own a house?

I think you can call it politicians being politicians. It sounds very noble to try and help people. Dick Durbin wants to cap rates at 36%. I would prefer if he would just say, we’re trying to close the industry down.

The problem with this argument is that people hear 500% interest and are shocked. Would you take a $2,000 taxi to NY from Chicago or would you buy a $200 plane ticket.

Think about it, would you give $300 to a person with a credit score in the 400’s and only make $4.14. It costs atleast $12/hour for just one employee, not to mention rent, utilities, advertisment, liscensing and everyone needs a manager. The loan itself would take 20 minutes to process. They can’t break even operating in their current state.

In the end, the politicians are just going to make consumers less able to make a decision for themselves, which ultimately leads to increased financial illiteracy. Instead of making consumers smarter, more experienced; we just make the lenders unprofitable.

If they shut down the industry, the world will go on. I would like to see the government offer $300 at 36% to anyone who needs it. If they shut down the industry, they should step up to the plate and fight the demand for short-term money.

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