Explaining Southern California's economy

Cracking down on payday lenders

Obama Nominates Richard Cordray To Head Consumer Financial Protection Bureau

Mark Wilson/Getty Images

WASHINGTON, DC - JULY 18: U.S. President Barack Obama (C) shakes hands with former Ohio Attorney General Richard Cordray during a presser to announce the nomination of Cordray as head of the in the Consumer Financial Protection Bureau as Special Advisor on the Consumer Financial Protection Bureau Elizabeth Warren (L) watches in the Rose Garden at the White House on July 18, 2011 in Washington, DC. The new bureau was created under a reform bill last year and intends to make basic financial practices such as taking out a mortgage or loan more clear and transparent to consumers while weeding out unfair lending practices. (Photo by Mark Wilson/Getty Images)

If you want to see what loan sharking looks like in modern America, look no farther than the payday lending industry. As this blog from the White House (yes, 1600 Pennsylvania Ave. blogs) points out, 20 million Americans use payday loans — and the average interest rate charged on a two-week loan is 400 percent!

The White House used a $100 loan as its basis. From a payday lender, a Benjamin winds up costing the borrower $16. If you accept that 20 million figure, this means that on $100 loans, the payday lending racket is bringing in $320 million every two weeks. OK, that's simple math and may not represent reality. But perhaps not that far off, as some borrowers will borrow more, some less.

Just for context, 20 million Americans equals 6.5 percent of the population. That's an alarmingly high number of people who are exposed to a horrifically high level of short-term interest. But it also explains why the payday lending business has taken off.

Read More...

Reportings: Yahoo for sale; JOBS!; Cordray versus Congress

Henry Blodget says that Yahoo, now that's it's axed CEO Carol Bartz and pretty much admitted that it's for sale (again), should buy Business Insider and hire "us" as CEO. We're going to assume that by "us", Henry means "Henry." He you have it: "We offer to allow Yahoo to buy Business Insider Inc., for $150 million.  And we offer to allow Yahoo to then appoint us acting CEO of the company…Once we have been appointed acting CEO of Yahoo, we will implement our plan." (Business Insider)

 

"How to bring the jobs back." The New York Times goes big, big, BIG on the Opinion page, serving up four provocative solutions to the unemployment crisis. (NYT)

 

According to Jay Carney, Obama's $300 billion jobs package "would be "paid for," not financed through deficit spending." (LAT) 

 

The battle over the confirmation of Richard Cordray to lead the Consumer Financial Protection Bureau has begun. Who's Richard Cordray? He's so not Elizabeth Warren. (LAT)

Read More...