The risks and benefits of so-called payday lending are certainly worthwhile of media coverage, and genuine instances of fraud or exploitation are and should be fodder for criticism in the print media. But it helps when your highlighted victim actually has good credit to start with and/or isn't consistently turning to Internet loans to supplement income.
No matter to Chicago Tribune's Stephen Franklin who presents readers of the May 11 Chicago Tribune with the tale of woe of one Rochelle Parker.
Parker, we're informed in Franklin's lead paragraph, only wanted to borrow $300 for Christmas gifts and medicine, so she took out an online loan only to get slammed with 842 percent interest.
Yet in the very next paragraph, we learn this is hardly Ms. Parker's first experience with online loans, and certainly not with abusing credit as a supplement to income:
The recently retired fingerprint technician for the Chicago Police Department had several other online loans that drained her financially and forced her to move in with her daughter. But getting another loan was so easy on the Internet.
Yet rather than painting Parker as the victim of her own addiction to borrowing, Franklin saw her as "falling through one of the newest trapdoors in the cash-strapped economy."
It's there that Franklin turned to looking at laws and regulation, or lack thereof, governing payday lending both online and in the traditional storefront setting. Only later, deep in the article, does he return to Parker's poor financial management (emphasis mine).:
Rochelle Parker said she rarely notices the loan's interest rates even when they are posted.
What matters, she said, is getting the money when she needs it and finding out how long it takes to pay it off. And with bad credit and no savings, she has turned more often to the loans in the last year.
Now she has at least five loans to pay off but not enough money to cover them, putting her in a fix. She hopes to resolve the problem when her pension checks start arriving soon.
Of course, even if Parker starts to climb out of the debt hole with fresh pension income, she'll only dig herself back into it if she doesn't rein in unnecessary spending. But why focus on that when it's so much easier to beat up on "unregulated" businessmen? Indeed, Franklin closed the article with Parker's daughter, Angelina, who lamented the stress payday loans can cause delinquent borrowers:
"If you are worried that they are going to turn off the lights, or you don't have enough to feed your children, you are going to do it," Angelina Parker said.
"You take the loan. And then pretty soon you look and five, six companies are taking money out of your checking account and you have no money."