Arizona Op-Ed Writer Gets Payday Loans All Wrong

With a national election just over a month away, the ante has been upped in the ways that candidates are bashing not just their opponents (lack of) credibility, but they as people. As a matter of fact, I haven't been able to watch an hour's worth of nightly news over dinner for the last few months, without being berated with a fistful of slanderous attack ads from all over the political spectrum.

But even worse than learning of John McCain's excessive investing in fine automobiles, or Paris Hilton's worship of Barack Obama, the media's reporting on various ballot measures in various states has proven to be biased and downright problematic. A glaring example of this "objective" journalism arrived in my Google Alerts this morning (10/2/2008) entitled, "http://www.tucsoncitizen.com/daily/local/98371.php>Critics Call Proposition 200 a Trap, Not Payday Loan Reform."

Tucson Citizen Reporter Garry Duffy begins his anti-Proposition 200 diatribe with the rhetorical question, "Would you knowingly take out a loan with a potential 391 percent annual interest rate that included allowing the lender to electronically raid your bank account for payment?" Members and supporters of the no fax payday loan industry never would do that, for the simple reason that taking out a loan with 391 percent APR is simply absurd. However, despite Duffy's sensationalized, desperate attempts for readership, the truth is that a person who utilizes a no fax payday loan, as intended, will never even pay a fraction of that in the brief period of time the transaction is outstanding; typically two weeks.

As for the allegations of payday lenders going in and electronically debiting money from your bank account without you knowing, all of them are outright lies. Long before an online or brick and mortar no fax payday loan company will give you money there are detailed applications and contracts that you must sign. Upon doing just that, you thereby acknowledge, in writing, that you fully understand how a lender will collect repayment on the due date, in addition to your rights as a no fax payday loan customer. So, if you note on your application that your next payday is October 14, you must sign a legal document stating that you understand that the lender will acquire their balance due on October 14 by electronically debiting your checking account. In other words, no payday loan customer is kept in the dark, and no shady practices exist.

Duffy then backs up his fallacious case with stories of "real" people who got in over heads by taking out a small loan, but ended up paying hundreds of thousands more by rolling the loan over time and again. One of these includes the woe-filled tale of a couple who had to keep on rolling over previous payday loans, then took out additional ones to make ends meet; yet another victim of sensationalism, completely ignoring the couple's obvious lack of financial literacy.

What Duffy also fails to mention is that in most states where no fax payday loans are legal, loan rollovers are severely restricted or completely forbidden. Instead, if someone is unable to pay their balance on the loan's due date, they are to be given a repayment plan at no additional cost. Though as a person who minored in Journalism in college, I understand that the Tucson Citizen is a business. I completely understand that the front page story, "Payday Lenders Really Help People When Used as Intended and With Proper Budgeting" won't sell half as many newspapers and save job like the headline, "Loan Sharks Running Payday Loan Companies Ravage Your Bank Account without Your Consent," will. I feel your pain, Duffy; I really do.

Our cravings for the latest news and information preserve the livelihoods of lowly news reporters across the nation. However, these jobs should not be retained at the expense of the objectivity, which is still trumpeted within the media's mission statement. This is where my biggest fear lies at the moment; the newspapers need big, nasty, juicy articles in order to keep their readers coming back for more. But some of these organizations have gotten so desperate to attain this goal, like in the case of reporting on Arizona's Proposition 200, that they are resorting to the use of half truths and bald-faced lies. Therefore, in order to make the best decision on Election Day, it's in your best interest to familiarize yourself with all sides of an issue.