Here’s the story of payday lending…

by Ken Agle

The first Latin phrase I ever learned was caveat emptor. I learned this vocabulary from The Brady Bunch episode where Mike Brady (the father, as you know) intended to help his son Greg select a car to buy. Instead of consulting his father, Greg went to his friend Eddie who suckered him into buying an absolute piece of junk. In discussing his purchase with Mike, Greg learns an important lesson:

Greg: Boy, did I ever get stuck with a lemon…
Mike: I think maybe you learned something about the business world.
Greg: What d’ya mean?
Mike: Well, look. You take sellers. They’ve got something to sell, right?

Greg: Right.
Mike: Naturally they’re going to make it sound as attractive as possible even if they have to exaggerate to do it.
Greg: You mean lie.
Mike: Yes. Quite often they do. Though they might call it “gilding the lily.” But the important thing is that you’re the buyer. You have to keep your guard up, See? It’s the old principle of caveat emptor.
Greg: Caveat emptor?
Mike: It’s Latin for “let the buyer beware.” Or to put it in the vernacular, “them who don’t look, sometimes gets took.” (The Brady Bunch, Season 3 Episode 4, “The Wheeler Dealer.” Redwood Productions, Paramount Television. 1971.)

Extrapolating on Mike Brady’s idea, I think we can learn something from this about the payday-lending world. Payday lending works like this: an individual needs some extra money, so they borrow from a payday lender on the basis that they will pay it back from their paycheck—and there is, of course, a huge fee associated with doing this. However, the system breaks down (on the consumer’s side) quickly, because most people do not pay back the full loan when they receive their paycheck. This creates a cycle of amazingly high interest costs as the consumer continues borrowing and borrowing, unable to pay off the entire loan amount or the interest rates. Just like Eddie, payday lenders create nice and friendly personas, only to get the best of their consumers. To the Greg Bradys out there, it sure sounds like a lemon!

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