Online Payday Loans

Truth in Payday Lending

Representative Eddie Farnsworth

Category: Quotes — Wednesday, February 14, 2007

“I’m missing why we’re trying to protect people from themselves in [the payday loan] industry and not others.”

Arizona House Representative Eddie Farnsworth wonders why lawmakers try to protect consumers against themselves when it comes to payday lending but not other industries. One of the industries Farnsworth referred to is the credit card industry, which made over $100 billion in 2005…

According to testimony before the Committee on Banking, Housing and Urban Affairs of the United States Senate two weeks ago, credit card company profits were $109.00 billion in 2005:

  • Interest: $71.13 billion
  • Interchange Fees: $20.62 billion
  • Penalty Fees: $7.88 billion
  • Cash Advance Fees: $5.26 billion
  • Annual Fees: $3.26 billion
  • Enhancements: $0.85 billion
  • Total: $109.00 billion

Credit card Cash Advance Fees alone exceeded the profits made by payday lenders (roughly $4.2 billion in 2006).

Representative Eddie Farnsworth is a member of the Arizona House of Representatives. He is chairman of the Judiciary Committee and a member of the Financial Institutions and Insurance Committee.

Sources:
Residents Get Their Say on Payday Loan Stores by Carrie Watters (The Arizona Republic)
Testimony of Elizabeth Warren, Leo Gottlieb Professor of Law, Harvard Law School, Before the Committee on Banking, Housing and Urban Affairs of the United States Senate (January 25, 2007)

If you would like to to learn more about credit card companies and some of their questionable practices (universal default, for example), please read Twelve Differences Between Payday Lenders and Credit Card Companies in our popular Articles category.

To learn more about the dangers of payday loans, please read Ten Payday Loan Pitfalls or browse the Pitfalls category.

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