Regulation of payday loans just another 'feel good' bill

Thursday, February 7, 2002

The road to legislation is paved with good intentions. That may be a twist on the old saw, but it's not far from the mark - if at all.

The Missouri General Assembly is currently weighing a bill which would regulate the state's "payday loan" businesses - those businesses advertising that they can help you out if you need cash today and your paycheck doesn't roll around until next week. "Regulate" might be too harsh of a word for some people, but what the legislation would do, in effect, is limit the price that could be charged for a service. That sure sounds like regulation.

Supporters of the bill point to what, admittedly, are horrible stories of people being charged triple-digit interest rates and basically having no hope of getting out of the debt they found themselves in after going to such an establishment. No doubt there could very well be some unscrupulous businessmen in the payday loan field, there are in many businesses.

But the bill, in its bottom line, basically sets out to protect individuals who should know what they are doing before they sign on the bottom line for a loan. There's nothing wrong with spelling out exactly what the interest rates could be, and requiring lenders to make sure the lendee is clear on the terms. But getting the government into regulating one more commercial enterprise just so we can set back and feel good about what we did for the "little people" is a crock.

Our legislators should be spending their time figuring out where money is going to come from to fund our public schools, maintain and hopefully improve roadways and attract more businesses and industries to the state.

That probably involves making some hard choices that might even include increasing taxes or fees to pay the bill. One thing it definitely leaves little time for is too much "feel good" legislation.