Dealing with Payday Lenders is Voluntary: Dealing with Government, Not So Much

“You should use other people’s money.”

If you have a mailbox, you get regular offers to do just that.  Samuel L. advises you of as much on TV.  If you have friends with so much plastic that they keep it bound in a rubberband, you’ve gotten the message. 

City Council has its own ways of using other people’s money.

First-term District 2 Councilman Jalen McKee-Rodriguez recently submitted several “council consideration requests” (CCR), which are basically new calls for city action, whether for zoning purposes, creating new, or amending old ordinances, etc. 

His range from CPS and SAWS rate freezes for seniors and those with disabilities, to the more routine contract procurement.  Another one concerns payday lending.

In 2013, the city council approved an ordinance that, among other things, capped payday loan amounts, and required that repayments made by borrowers reduce the principal-owed by a prescribed portion.  The councilman wants to include “signature and personal loans” within the scope of this ordinance. 

Debt isn’t absolutely a bad thing.  Emergencies arise.  Entrepreneurial ideas may as well.  Regardless, borrowing doesn’t come without tradeoffs, or consideration.

When we put our paycheck into the bank, our money doesn’t simply sit there.  It goes into a large pool of other deposits that banks then loan out. 

But we don’t let them have our unspent money for free.  The interest we get (paltry as it’s been in recent memory) is the price we charge them for the privilege of our business.  The banks then pass that on as the price to borrow from them.

One thing payday lending has in common with going to a bank for a loan, or using a credit card, is that none of these actions are the result of a person being forced to do something.

Dealing with government however, is another story. 

Its actions are meant to manipulate you into behaving in certain ways, many times unjustifiably depriving you, and/or someone else, of your freedom.  It does this by taking your property and/or resources, threatening to throw you in jail, or worse. 

Given the sorry state of our politics, many of us are bound by these impulses of elected officials, who look down to us in such a manner. 

Now, a few of them want to further squeeze this financial lifeline (Councilwomen Phyllis Viagran [D3], Teri Castillo [D5] and Melissa Cabello Havrda [D6], along with councilman John Courage [D9] are co-sponsoring this CCR).

Payday lenders are certainly a last-resort.  They’re like the convenience store of financial assistance.  That’s one reason both have higher prices (interest rates, in the case of the lenders).  Those prices also serve to dissuade customers from making it a habit. 

Other incentives exist to prevent this from happening.

The strained budgets that start to limit what you can do.  The diminished ability to save.  The danger of bankruptcy, and the subsequent hit to your credit that hinders your ability to borrow for big-ticket items like a car, or a home. 

Many of us have been there, and learned our lesson to one degree or another.

Nevertheless, have our leaders not entertained the possibility of what could happen if they and their successors continue this regulatory creep? 

The natural conclusion is to drive this voluntary activity underground, into the black market, where there is zero legal recourse for either party.  It would become what San Antonio Police Chief William McManus recently described as “high-risk” behavior. 

In other words, a government-created crime.

For now, if you have the time and resources to comply, or contribute to the city’s purse with a $500 fine, no problem.  That’ll go into the pot with the revenues they have from the other source that already allows them to pester citizens: property taxes. 

All this because, rather than respect and defer to parents in guiding their kids on finances, or allowing us to navigate our own way and take responsibility for our lives, politicians and bureaucrats want their cut. 

They also want to be seen as a savior. 

It’s not enough to set a good example, and empower people.  They need to feel something more than useless while they’re pilfering what we’ve worked for, and saved.  A little rah-rah from their fellow traveler activists who hope to feed from the same trough one day is just gravy.

Certainly voters deserve better.