Katherine Smith | Predatory dangers
On Feb. 5, a group of students and concerned citizens protested outside of the CarMax Lending Center on South Main Street in Harrisonburg in the hopes of raising awareness about the abuses of predatory lending.
In response to the people who say that loan centers address a need of the community, I would agree. If it weren’t for loans, many people wouldn’t be able to make critical payments. The main problem for me doesn’t stem from the fact that these companies exist, but from the terms and conditions that surround them — it’s not the interest that’s being charged, but the high amount of interest that is the problem.
The illusion that these payday-lending centers set up is quite convincing: while appearing to provide a service to individuals who need to make car or rent payments, their clients end up becoming victimized and soon spiral further into debt. I would agree with the protest sign that read: “It’s not a service, it’s a trap.”
There will always be people at the top and bottom of the economic ladder. However, this does not mean that the people at the top are entitled to manipulate and profit at the expense of the people at the bottom. Until interest rates are regulated in fairer way, I wonder just how informed customers are before taking out a loan.
Bottom line: The industry needs to be regulated. Laws are instituted to protect the well-being of people and it is evident that without them the desire to make a profit goes unchecked and trumps all else, even if it comes at the expense of other members of the community. Predatory lending takes advantage of those who are financially vulnerable.
This pressing moral and legal issue needs to be addressed sooner rather than later if we are interested in establishing a more equitable society. I urge you to write to our government officials and push them to cap interest rates at a reasonable level and limit the number of loans an individual can take out annually. How can we hold anybody accountable for this injustice if a comprehensive law without loopholes doesn’t exist in Virginia?
– Column by Katherine Smith