No. of Recommendations: 7
If some people can't get sub prime credit from a bank, they will take out a payday loan to get what they want or need instead.


In my previous post I only discussed the ethics of sub-prime lending. Now I'll discuss what I think about it overall.

I'm sick of hearing people whine about it.

You know how it got started? Banks used to NOT lend to poor credit prospects very much. And people whined that it was unfair to minorities. They called it racist. So the government stepped in and MANDATED that a certain percentage of loans (specifically mortgages in this story) be made to minorities. Banks would be punished if they didn't meet the mandated quotas. And, as they weren't getting enough applicants to meet those quotas, they were FORCED to target advertising efforts towards poor credit prospects to bring them in the door, and they were FORCED to give those poor credit prospects loans.

The very predictable result of all that is there is a higher default rate, and a higher percentage of those loan recipients get into trouble.

Then the same type of people who whined about the unfairness, prompting the government interference, and thus CREATING the problem, are now whining about the problem. They BLAME the banks.

My conclusion: Don't entertain whiners who don't have good reasoning skills.

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