Sahara Fragile

Main Menu

  • Home
  • Sahara desert
  • Namib desert
  • Kalahari desert
  • Savanna desert
  • Fragile States

Sahara Fragile

Header Banner

Sahara Fragile

  • Home
  • Sahara desert
  • Namib desert
  • Kalahari desert
  • Savanna desert
  • Fragile States
Fragile States
Home›Fragile States›Simulation Shows Problems With Payday Lenders | Business

Simulation Shows Problems With Payday Lenders | Business

By Christopher J. Jones
March 9, 2021
0
0

BELTON – It was just a role play with no real consequences, but the frustration of those who participated in the activity was real.

Helping Hands Ministry in Belton recently ran a payday lender course, which included a simulation, for some of its clients.

In addition to providing food and clothing to low-income families living in the Belton and Academy school districts, Helping Hands has a charitable ministry that helps clients in emergencies pay for utilities, rent and drugs. These clients are required to take a family finance course and another elective course.

The Payday Lender Category is a project of Helping Hands Executive Director Rucker Preston, Lauren Serafy and Janae Griffiths. All three are studying for their Masters in Social Work at Baylor University.

“We are by no means experts on the subject, but we are learning and exploring the effects of payday lenders,” Preston said.

According to a report by Pew Charitable Trusts, payday loans typically offer about two weeks of credit, due in full on the borrower’s next payday, at annual interest rates of around 400%. While borrowers quickly find money to pay rent and other bills, they often remain in debt for months, struggling to pay off a loan that was touted as a short-term solution.

According to the Pew study, it takes a typical payday loan customer 5 and a half months to pay off the loan. Ultimately, the fees paid can amount to more than the original loan.

After watching a short video, the Helping Hands class members participated in a simulation and Maxine James, a mother of two, was the first.

Kim Preston served as the banker and Serafy and Griffiths were the lenders. Make a choice

Simulation participants received a fixed salary from Preston at the start of each round. Each ride also came with bills for necessities – $ 50 for food, $ 100 for the car, and $ 200 for rent – which exceeded the salary by $ 250.

Participants had a choice: take out a payday loan or forgo food, transportation or accommodation, represented by a tin can, a small car and keys.

“The object of the game is to get through all three rounds with all three necessities, but also to have no payday loan debt,” Griffiths said.

The fee for the payday loan simulation was $ 25 for a $ 100 loan, $ 50 for $ 200, and $ 100 for $ 300.

During the first round, James took out a payday loan of $ 100 and a fee of $ 25 was charged, which was not enough to cover his expenses. So she returned to payday lender Griffiths for an additional $ 100 which cost her an additional $ 25.

James made it through the first round with everything she needed but owed the lender $ 200.

In the second round, James took out a $ 100 loan from Serafy, the second lender.

In the third round, James decided to pay Lender 1 $ 50 to roll over the loan and $ 25 to Lender 2 to do the same. She also gave up food and her car.

“I guess I’m going to have to take a walk to get to work,” James said.

By the end of the three rounds, James had paid the loan companies $ 200 in fees and still owed $ 300 for the loans.

“She could potentially lose her job because she doesn’t have transportation,” said Rucker Preston.

Throughout the role play, James said she worried about how she was going to feed her family and how she was going to get to work.

“It was stressful; there was the constant worry about how you are going to survive, ”said James. “How are you going to pay them back (the lenders)? “

Like many, James was unaware that payday loans had to be paid off all at once.

“That’s the catch,” she said.

Preston and others are looking for ways to better serve people with poor credit who need short-term loans.

Texas has no limits on fees or loan size, but there has been a recent statewide push to protect consumers from predatory payday lending and auto title lending practices. A legislative effort to tighten restrictions on lenders has failed, but since then College Station, Bryan, Austin, Houston, Dallas and San Antonio have passed city ordinances to limit lending. Some cities limit the number of payday lenders in their communities.

In Waco, a group of churches are looking for ways to provide small loans to people who would normally go to payday or car title lenders.

“There would be no or very low interest rate for the first two weeks,” Griffiths said. “There is no pilot program yet, there are only discussions.”

It is Preston’s dream to have such a program in the Bell County area.

Related posts:

  1. ‘We’re just an accident of nothing’: How Monzo and HSBC’s new overdraft fees could hurt UK families | The independent
  2. Op-Ed: Reform or boycott additional scholarships
  3. 8 grands changements affectant vos finances ce mois-ci, y compris la fin des congés et les congés de paiement
  4. QuickQuid Collapse – Everything You Need To Know As Payday Lender Leaves UK
Tagspayday loans

CATEGORIES

  • Fragile States
  • Kalahari desert
  • Namib desert
  • Sahara desert
  • Savanna desert

RECENT POSTS

  • In South Dakota and Nebraska Deep Red, voters used ballot initiatives to reduce inequality
  • Innovative solution for financial ills
  • “We were abandoned in the desert at 2 a.m.”: migrants expelled from Algeria to Niger
  • ILoveBoobies participates in Desert Dash
  • Land Bank Self-sufficiency is a mirage in the desert | News, Sports, Jobs

ARCHIVES

  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • February 2019
  • January 2019
  • December 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • October 2017
  • September 2017
  • August 2017
  • June 2017
  • May 2017
  • March 2017
  • January 2017
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • January 2016
  • November 2015
  • July 2015
  • May 2015
  • April 2015
  • January 2015
  • December 2014
  • October 2014
  • September 2014
  • June 2014
  • May 2014
  • January 2014
  • November 2013
  • October 2013
  • September 2013
  • April 2013
  • March 2013
  • November 2012
  • May 2012
  • October 2011
  • November 2010
  • April 2008
  • July 2006
  • November 2005
  • Privacy Policy
  • Terms and Conditions