Friday, March 06, 2009
High Cost Lenders Profit from Desperate Times
By Rebecca Lightsey
As more businesses close and unemployment lines lengthen, a virtually unregulated sector of the Texas economy continues to rake in huge profits by providing high-cost payday and auto title loan services that often drag desperate families deeper into financial crisis.
A Texas-based provider of such loans recently reported record-breaking annual revenues topping $1 billion and a net income of $81 million.
So how do small-dollar loan companies make this kind of profit in the middle of the nation’s worst economic crisis since the Great Depression?