Payday loans exist as literally the only option for the poor for short-term, small-loan financing. This predatory debt trap directly takes advantage of poverty through confusing loan terms and high-interest rates, essentially enabling the poor to be monetized.
The solution? Increase the options. Traditional bank corporations and the federal government can provide a competitive solution, lowering prices for the borrower and alleviating unnecessary debt pressure on the poor.
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Bank of America, one such spear-header, already provides small-dollar loans with a flat fee, charging no late or overdraft fees. Making small-dollar loans easily available on such a large scale empowers payday borrowers to catch their breath, especially during the uncertainty of the pandemic. Other banks should follow suit.
The federal government can also provide such loans through the Postal Service, especially given the established, easily accessible storefronts in neighborhoods that lack traditional bank branches. The Postal Service should implement banking services and small-dollar lending through the cooperation of the federal government, a traditional bank or both. With more options, payday borrowers can focus on getting back on their feet rather than stumbling into a confusing debt trap.
Udaykiran Vissa, St. Louis
There’s no DeJoy in Mudville to read in your editorial that Postmaster General Louis DeJoy at $300,000-plus is the highest paid in history and received a $75,000 “performance bonus.”
I hope whoever made that boneheaded decision mailed him the bonus check.
Illinois Sen. Dick Durbin
Combating violence starts with cooperative civic leadership
While I agree with Mayor Lori Lightfoot’s reply to Fran Spielman’s interview of Ald. George Cardenas that “the root causes of community violence are deep, complex and generations in the making,” I did not find Cardenas’ views on crime or leadership to be “ill-informed.”
One theory I believe, from 38 years of serving as a Chicago police officer in many positions throughout the city, is that crime is co-related but not caused by hot weather, the COVID-19 pandemic or broken windows. Also, “guns, gangs and drugs” are trite soundbites without any lasting solutions.
Experienced and enlightened civic leadership, including academics, public officials and police executives, is a start. Collectively, they are responsible for the policies, training and morale of police and the public safety relationship with the public. The solutions are clear. Implementation is difficult but starts with collective and cooperative civic leadership.
Richard Guerrero, University Village