HBO's "Last Week Tonight with John Oliver" has found its unique and successful variation of the news comedy routine: rather than spending 2 minutes here or 5 minutes there on every hot topic of the day in quick succession, à la John Stewart or Stephen Colbert, Oliver dedicates the bulk of each weekly broadcast to a single issue. Recent weeks have covered the Indian general elections, capital punishment, the perils of native advertising, and the United States' astronomical incarceration rate. This week: the payday lending industry.
When folks literally working paycheck-to-paycheck need emergency money that can't wait until next Tuesday, and it is beyond the capacity of any friend or relative to lend the money themselves, they often turn to payday lending. Payday loans, for those who are fortunate enough to exist outside their grinding cycle, are short-term loans that become due on the borrower's next payday. The interest rates are generally in the hundreds of percents, though sometimes the thousands. Often times, the interest on these loans increases so fast that the eventual paycheck doesn't cover it, and the borrower is forced to take out yet another loan to cover the one already owed. The self-stated business plan of many of these companies, as Oliver reveals, is intentionally cyclical.
Regulation has proved difficult. Take Texas, for example, which recently attempted to crack down on the predatory, usurious practices of many of its payday lenders. The regulatory bill in question faced stiff opposition from Rep. Gary Elkins, owner of 12 payday loan branches. Rep. Vicki Truitt, a representative seen slamming Rep. Elkins on the Texas House floor for his conflict of interest in the Oliver segment linked above, went on to lobby for a payday lender herself just over than two weeks after leaving office. Even the Texas Finance Commission, the regulatory agency overseeing the industry, is chaired by William J. White, vice president of one of the largest payday lenders in the country. Cyclical, indeed.
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