Why payday loan sharks should be arrested and tried

It is a relief to see federal prosecutors and regulators finally cracking down on payday lenders. While the moves are past due, it is unclear if the prosecutions will be enough to deter a sleazy industry or if tough new restrictions will last.

Payday lending is simply a genial term for loansharking. Lenders make short-term loans to cash-strapped individuals at exorbitant interest rates that can top 800 percent. The high-cost loans leave borrowers, often already living on the edge, deeper in debt or even bankrupt.

Lenders have long argued that payday loans provide quick financial relief and fill a void left by banks that have pulled out of rural and inner-city markets. Lenders claim steep interest rates are necessary because many borrowers have bad credit and are a high risk.

But just as it was with the predatory mortgage loans that helped fuel the housing boom and bust, payday lending is an insidious business that preys largely on poor and working-class consumers, leaving many worse off.

That’s why it was good to see federal prosecutors bring racketeering and conspiracy charges against one of the biggest payday lenders in this region, Charles Hallinan, owner of MyNextPaycheck and more than two dozen other loan companies.

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