After skewering everything from FIFA to climate-change deniers on his HBO show ‘Last Week Tonight,’ British comedian John Oliver has turned his razor wit on the payday loan industry.
In the US, the industry generates an estimated $27 billion in loan volume annually, and payday loan outlets outnumber Starbucks and McDonalds; one in 20 American households have borrowed from them. But these loans often keep borrowers in a cycle of debt as high interest rates and tricky regulations make repayment difficult, forcing them to borrow more money to pay for the debt.
Companies sometimes charge up to 1900% in interest and evade short-term lending regulations by registering as ‘mortgage lenders,’ and use other loopholes to avoid state regulations. Quipped Oliver: “Basically payday loans are the Lay’s potato chips of finance. You can’t just have one. And they’re terrible for you.”
(Note: Viewers have said the YouTube clip does not play in the UK)