A commenter on my blog yesterday mentioned Senator Clinton's support to protect the poor who are taken advantage of by lenders who charge short term high interest rates and as much as $40 to cash a check. In the WSJ today, Ex-President Clinton and California Governor Arnold are promoting a plan (Beyond Payday Loans) to have banks within banks who would cooperate as financial institutions or by governmental legislation to prevent poor and usually uneducated people being further robbed by Pay Day Loan shark operations that proliferate wherever poor people live.
The article says that approximately 11% of all Californians do not have bank accounts, including 25% Latino and black residents. I know many of the Latinos are illegal but as long as they are here, we are obligated to treat them in a lawful manner.
I'm not sure that the proposed system would work because of their fear of being arrested or the fact that many, poorly educated, have bought into the "bleeding liberal" theory that no reputable financial institution can be trusted. Also, many people who need help will not accept help. That is why few homeless coalitions that attempt to serve the mentally stressed and depressed have a large measure of success; the poor often will not have one of the few things they can claim taken away from them; the freedom to make their own decisions; these bad decisions often leading up to fatal mistakes including slowly killing themselves and many times, others.
The Bill/Arnold dream claims it would put more than $8 billion for consumer spending, the amount millions of people with no bank accounts, now spend each year at check-cashing outlets, payday lenders and pawnshops.
The plan states that "it won't cost taxpayers a dime". I've heard that siren song before but I believe the people that don't use traditional banks should not be taken advantage of by opportunist money changers.
Think the plan out and try it in California, in Boston, Providence, Savannah, New York and Seattle, all who are spearheading their own efforts.
A better system has long been needed. I hope it works. Maybe someone will push the idea in Peoria. I would help.