6/06/00 6:00 p.m.
Payday Mayday
A burgeoning industry up for the slaughter.

By NR's Ramesh Ponnuru & John J. Miller

ongress is threatening to kill a burgeoning industry that serves the financial needs of the working poor. Payday-advance companies let people borrow against their next paycheck. Someone who needs $200 right away can get it in return for writing a check for, say, $230 dated a few weeks in the future. The transaction is quick, and it doesn't show up on credit records. The fee ($30 in our example) is generally cheaper than what a bounced check or late payment would cost.

Still, some lawmakers think such fees are excessive. John LaFalce, Democratic congressman from New York, has talked about applying bank-usury laws to the industry. This would effectively destroy it. The laws in question generally cap annual interest rates at somewhere between 25 and 30 percent. Calculated at an annual rate, payday-advance fees are often over 400 percent.

But that's an absurd calculation. As the industry points out, nobody calculates whether a cab fare is reasonable by comparing the per-mile cost to that of a cross-country plane trip. Cabs aren't for long-distance travel, and payday advances aren't for long-term loans. (It's also stupid to assume that the cost of processing a loan is proportional to its size.)

Right now, LaFalce and other Democrats, egged on by Naderite "consumer" groups, are trying to kill the industry another way. They have introduced a bill to prohibit the companies from holding post-dated checks drawn on federally insured institutions (such as all the banks covered by the FDIC). LaFalce wants to attach this odious amendment to the banking bill winding its way through Congress.

Salmon Run
Arizona's anti-bilingual education initiative has received its most important political endorsement yet. Republican congressman Matt Salmon announced his support at a Phoenix press conference on Monday. "Salmon is the first Arizona political leader with the courage and determination to stand up for the rights of immigrant Hispanic children to be taught English in our public schools," said Maria Mendoza, co-chairman of English for the Children.

The measure is modeled on California's Proposition 227, which voters approved two years ago even though it faced strong opposition from both Democrats and Republicans.

In other bilingual-ed news, the Texas chapter of the League of United Latin American Citizens (LULAC) is recommending that all students get the opportunity, dubious as it is, to receive bilingual instruction from K through 12.

Etc.
NR editor Richard Lowry is looking for an executive assistant to handle correspondence, scheduling, and the like. Applicants should be organized, conservative, and enjoy life in New York City — including the opportunity to vote against Hillary. Send resumes to Dorothy McCartney…

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