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Yes I understand all that. But if the post office took on the role of the payday loaner, what happens when the person doesn't pay back the loan? With payday loans now the loaner will make automatic withdrawals from your bank account or wage garnishment through your employer or even turn it over to a collection agency.
Experian: What If I Can’t Pay Back a Payday Loan?
"In some cases, either the payday loan company or the collection agency that purchases the debt may decide to file a lawsuit against you to recover the money owed. If a judgment is filed against you, it will become a matter of public record, and may then appear in the public record section of your credit report. Judgments remain on your credit report for seven years from the date they are filed, and have a substantially negative impact on credit scores."
The people who typically use payday loans are those with bad credit and cannot get a loan from their bank. For the payday loaners, they are a higher risk customer and therefore charge higher rates and penalties.
Now if the post office got into the business of making payday loans to people with bad credit, charging very low interest rates, minimal or no penalties for non-payment, and the person cannot pay back the loan or decides to not pay back the loan, what then? Will the post office garnish the person's wages or turn it over to a collection agency for harassment of the individual? Ultimately, will the taxpayer be on the hook for all the bad loans?
The bad credit risk people probably have already accumulated massive credit card debt and are paying excessive rates on those balances. Americans now own over $1 trillion in credit card debt, and those that are maxed out on their credit cards use payday loans to drive them further into debt.
So I wonder if in opening up a new avenue for cheap loans from the post office, the post office in effect becomes an enabler of bad credit and undisciplined spending by the customer.