Argumentative Essay On Payday Loans

In the history of the United States, few legitimate businesses have been attacked with the fervor and animosity that critics have been directing toward payday lenders. President Obama has spoken out against payday loans, and some of his top aides met with a coalition of religious leaders recently to discuss the need to regulate the industry. When comedian Sarah Silverman was a guest on Last Week Tonight, she and host John Oliver urged consumers to consider an alternative to payday loans as "literally anything else." Several states have already enacted legislation that bans or severely limits payday lending. Credit Karma calls payday loans "just bad news." The Consumer Financial Protection Bureau, commonly known as the CFPB, has led the charge

If payday loans are as bad as the critics proclaim, why do so many Americans use them? In simple terms, it is because most of the borrowers do not hate payday loans. Borrowers tend to view payday loans as an integral part of their finances. Many do not have access to other means of dealing with a financial crisis. They may be among the 29 percent reporting zero savings in response to a survey conducted by Bankrate.com or among the 28 percent of Americans who do not have a credit card. They may not have family, employers or friends with the ability or willingness to loan them money in an emergency.

Many of the borrowers who seek payday loans are living paycheck-to-paycheck. This does not necessarily mean that they are poor. A report from CNN revealed that 12.5 million Americans with a median income of $21,000 lived paycheck-to-paycheck, but 25.5 million people with a median income of $41,000 did the same. A paycheck-to-paycheck existence means that these people will have greater difficulty weathering a financial shock; an illness or death in the family, a major car repair or variations in income can force them to choose between buying groceries, paying rent or keeping the utility company from disconnecting