Essay Payday Loan Solutions : Slaying The Hydra

1707 Words Apr 1st, 2015 7 Pages
Faller, Benjamin D. “Payday Loan Solutions: Slaying the Hydra (and Keeping it dead.) (Cover Story).” Case Western Reserve Law Review 59.1 (2008): 125-160. Academic Search Complete. Web. 1 Apr.2015.
In the Article “Payday Loan Solutions: Slaying the Hydra (and keeping it dead,) (Cover Story,)” Benjamin D. Faller begins his article by giving a different back-story as to how payday lending or is critiqued. Faller writes his article to focus on the “larger scale” (126) of payday lending because he feels like it affects the nation as a whole and not just one individual. Faller begins to talk about how an individual can become caught up in the payday loaning debt trap. For example, Faller uses his sense of authority to say that “The payday lending business model incorporates several features that function to extend loans and prevent borrowers from paying off the loan and walking away free and clear. These features are the short term of the loan coupled with a balloon payment and the lack of an option to repay the loan in installments.”(135). Faller uses counter arguments in his article for “those that suggest that the problem with payday loans is not the loans themselves, but how borrowers use them.” (135). Faller gives statistical data from a North Carolina study that showed that “the [payday loan] industry relies almost entirely on revenue from borrowers caught in a debt trap [and that] ninety-one percent of payday loans go to borrowers with five or more loan transactions…

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