They’re awful and impossible to regulate. That’s the gist of John Oliver’s detailed, angry and spot-on take on the payday loan industry on HBO’s Last Week Tonight.
The 16 minutes are worth watching (see video below), as Oliver chronicles the marketing angles of payday lenders and attempts by the Consumer Financial Protection Bureau and others to regulate such predatory loans, which can carry the equivalent of 1900 percent APR, or higher, and place borrowers into a cycle of debt which is hard to escape.
The Consumerist offers some highlights below, but watch the video for the full impact of this epic rant on payday loans.
1. On 1900% APRs on payday loans:
“Even the most demanding, abusive football coach only ask for 110.”
2. On a single payday loan resulting in several subsequent payday loans to cover the original amount borrowed:
“Basically, payday loans are the Lay’s potato chips of finance — you can’t have just one and they’re terrible for you.”
3. On the huge amount of money that payday loan borrowers often end up paying just to finance a small initial loan:
“It is not often that a metaphorical slippery slope costs as much as a ski vacation.”
4. On the argument that the customer demand for payday loans justifies their existence:
“It’s also worth pointing out that the customer demand for heroin is overwhelming and that doesn’t mean it’s a product you’d necessarily recommend to your friends to get them out of a jam.”
5. On Cash America paying millions in penalties for illegally overcharging military servicemembers:
“They must have been the ones driving around with the bumper stickers saying ‘Extort Our Troops.’”
6. On Ohio payday lenders getting around state laws regulating short-term lenders by registering as “mortgage lenders” who just happen to offer mortgages with values as low as $300:
“Why even bother calling yourselves mortgage lenders? Why not just call yourself ‘peanut butter octopus’ companies? You can’t regulate peanut butter octopi; they don’t technically exist.”