Are title loans bad? That's a question you might ask better at your local "legitimate" bank. In tough economic eras, such moral questions are confused by which side of the razor wire of the human struggle you are cutting your feet on.
When blended in the eddies of catastrophic economic times, you might as well ask the Hungarian man who, after robbing a regular U.S. Bank last week in Las Vegas, Nevada, immediately drove to Rapid Cash one mile down the street to make a payment on his car title loan.
In a convenience-crazed society, where serious sacrifices are asked of us, not only to maintain our lifestyles, but ever more frequently, even our lives, the moral ambiguities of whether a car title loan is bad might also be better asked at, once again, a local branch of U.S. Bank near you. At that definitely-not-bad institution, bank officials have been busy, as Mark Twain once put it, when describing the insurance industry, "making the destruction of our race easy and convenient."
In 2008, U.S. Bank, as in U.S. Bancorp., received $6,599,000,000 from the Emergency Economic Stabilization Act. But U.S. Bank, to its credit, was among the first to pay off that $6.6 billion to U.S. taxpayers via the U.S. Treasury Department. At year-end 2008, U.S. Bancorp had total assets of $266 billion.
However, if a common person, beset by real-world challenges sought a "legitimate" bank loan from U.S. Bank, anyone with credit or income issues will likely only receive the polite convenience of being shown the door. Thus, in the so-called "pinch," a regular guy or gal who finds bank robbing extreme, unthinkable and so on, might feel wise to consider an alternative: Such as, walking through the doors of a car title loan lender, face illegitimate interest rates, secret costs, and an anxious expectation the loan be paid in a month.
Governments entities at state and local levels have, more often then not, decided to side with "legitimate" banks, making it more difficult for payday loan lenders and title loan entities to operative. These tax-paid entities know where their bread is buttered. For more than a century, they have dealt with federally insured banks.
For example, this month in Decatur, Illinois, the city moved to limit where payday loan and title loan business would be located.
According to the story in the Herald-Review, "The proposal would allow existing businesses to continue under the previous rules. It would require that consumer credit services, such as payday loan and title loan businesses, be located at least 1,500 feet from each other and only in areas zoned as B-2 Commercial Districts. Currently, pawn shops and title loan, payday loan and consumer installment loan businesses are not defined in the zoning ordinance. The measure would adopt definitions that are consistent with the way the state defines those businesses."
In Decatur, zoning had yet to meet the growth of such businesses. But the recommendation from the town's planning commission to the city council, according to Decatur City Manager Billy Tyus, "“Credit services regularly charge interest rates that are higher than traditional licensed financial institutions ... which, in our opinion, works in opposition to the goal of community economic stability,”
However, there was no mention in the assistant city manager's report about what happens when a citizen is a mad Hungarian with his back to the wall.
Indeed, as a lesser of two evils, it is up to the man or woman living on the razor wall of tough economic times to determine which is the best way to come out ahead, which is more convenient, and which is less scary, noble, less embarrassing and so on.