Broke, USA: From Pawnshops to Poverty, Inc. -- How the Working Poor Became Big Business

[Liberal_in_LA]

Broke, USA: From Pawnshops to Poverty, Inc. -- How the Working Poor Became Big Business

Montana voters on Tuesday approved a ballot initiative to cap interest rates on short-term credit at 36 percent, effectively banning payday loans -- paycheck advances of several hundred dollars with fees that amount to annualized interest rates of 400 percent or so.

During the payday's peak in the mid-2000s, storefronts hawking high-interest short-term loans in 38 states outnumbered the nation's McDonald's and Burger King venues combined, reports author Gary Rivlin in "Broke, USA: From Pawnshops to Poverty, Inc. -- How the Working Poor Became Big Business."

With the help of brand-name banks like JPMorgan Chase, Bank of America, Wells Fargo, and Wachovia, subprime and payday lenders raked in $150 billion in annual revenues, in what Rivlin concludes amounted to a 15 percent "poverty tax" on the working poor.

http://www.huffingtonpost.com/2010/11/04/from-pawnshops-to-poverty_n_779072.html

And then there's payday godfather Allan Jones, who can thank high-interest loans to poor people for all his fancy cars, yachts, and jets. When Rivlin mentioned to him that Cleveland seems like kind of a white town, Jones said, "That's why I can leave my keys in the car with the door unlocked....We have just enough so that our football and basketball teams are good."