Repeat customer traffic is the key to the success of most businesses.
Unfortunately for consumers, especially low-income folks, that also applies to payday loan joints. A federal watchdog report found that about half of all payday loans are made to folks who extend their loans, The Associated Press reports.
In fact, many have to extend their loans so much that they end up paying more in fees than the original amount they borrowed, the Consumer Financial Protection Bureau notes.
The Missouri legislature repeatedly has blocked measures to regulate the payday loan industry — effectively opening the wallets of area residents to be picked by average annual percentage rates on loans that exceed 400 percent.
When people are paying such crushing amounts in interest, they don’t have money to save for home or car repairs, let alone to send children to college. They don’t have money for consumer goods, which overall hurts the economy and makes cities like Kansas City look more and more dirty, unkempt and rundown.
The rich get richer, the poor get poorer in an unsustainable ugly cycle.