topic Re: Billionaires find loopholes in Payday Loan laws. in Personal Finance

Billionaires find loopholes in Payday Loan laws.

AndrewF — Mon, 16 Feb 2026 19:23:06 GMT

https://www.youtube.com/watch?v=hBI_FLYfwmM

Billionaires have found loopholes that let them do payday lending even in states that have outlawed it.

They call it Early Payday or various other things.

Many low wage employers partner with companies that say you can advance part of your next paycheck with no interest.

But then they demand tips.

At least one of them shows a picture of a hungry child and the less you tip them, the hungrier and sadder the child gets.

But only 10% of the "tip" goes to a charity that feeds children.

So if you tip $10, that charity only gets $1.

But they know that when you see the slider and the child gets sad and hungry, you "tip".

So then if you say no to the "tips" and make the cartoon child sad, they eventually give up on the "tip", but now there's a fee if you want your money soon. Although if you wait like 3 days, there might not be a fee. Presumably you're asking for a payday advance because you need to pay people now.

And between the tip and the fee, you just paid them more than you would have to get the same amount from a payday loan shop.

And since it's not technically a loan, laws against payday loan stores some states have do not apply.

Then these executives testified to congress that it wasn't a loan.

And one of the CEOs accidentally says "there's no interest because they're BORROWING from themselves, I mean not borrowing, I mean"

Like, "You had one job!"

The people behind these apps are generally venture capitalist billionaires.

It doesn't solve any problems of working a low wage job, and when payday arrives, your check will just be nothing, and you might have paid fees to these places to get access to it early.

The main point appears to be that more States have gotten wise to the harms of payday lending and have taken steps to cap interest rates, or ban it entirely.

In other cases, States have even said that judgments from tribal loan companies are not enforceable in their State because the lending wouldn't be legal if it was taking place under their laws. When that happens, the tribal loan companies tend to just not write any more loans to people in that State because the court system isn't going to help them rake people over the coals.

But early payday apps make an expensive payday loan look like they're doing you a favor, and while it can be free, you have to do a lot of work bypassing multiple screens asking for tips, and then choose not to expedite funds you need right away, so for many people they're not free.

Re: Billionaires find loopholes in Payday Loan laws.

JamesS84 — Mon, 16 Feb 2026 23:07:06 GMT

Wow, so are they going to crack down on them or what? Does your employer do this?

Re: Billionaires find loopholes in Payday Loan laws.

AndrewF — Mon, 16 Feb 2026 23:43:44 GMT

@JamesS84 wrote:
Wow, so are they going to crack down on them or what? Does your employer do this?

My spouse works at Walmart and I get Social Security and some other fixed income, but I noticed that Walmart's "fintech", One Financial, has an early payday option.

For Walmart employees, it is apparently free and same day, but other employers that configure it, One might take a fee from them.

Instead of raising wages, Walmart is just giving you some of your money before payday, but when you get to payday and there's nothing there, you won't be ahead, you'll have to keep advancing money out of your next check too.

During COVID, and the hyperinflation wave that followed, Walmart raised wages, but now within the last ten months since "Liberation Day", Walmart has yanked about 80-90% of the job postings down, and the ones that have gone up usually involve starting wages that have been cut by about $2-3 an hour.

Re: Billionaires find loopholes in Payday Loan laws.

FicoMike0 — Mon, 16 Feb 2026 23:56:22 GMT

Sounds like someone needs an a$$ whup'in. How bigga boys are these vulture communists? Probably just about ripe a$$ whup'in size!

Re: Billionaires find loopholes in Payday Loan laws.

AndrewF — Tue, 17 Feb 2026 01:46:54 GMT

I think one of them the video mentioned was Marc Andreeson of Andreeson Horowitz.

The guy always did remind me of Beldar Conehead. You can't unsee that. You're welcome.

Re: Billionaires find loopholes in Payday Loan laws.

FicoMike0 — Tue, 17 Feb 2026 02:05:01 GMT

Wow, that bald ba$tard does look like beldar. I'd be careful with the a$$ whup'in, he might pull some Remulak kung fu on you.

Maybe we could turn him in to ice, I don't think the us has a Remulak embassy.

Re: Billionaires find loopholes in Payday Loan laws.

CaneVariant — Wed, 18 Feb 2026 02:42:47 GMT

Plenty of non-billionaires out there trying to scam people and waste our tax $. Stop making it about the rich.

Re: Billionaires find loopholes in Payday Loan laws.

ptatohed — Wed, 18 Feb 2026 04:49:45 GMT

Yes it's shady and predatory but no one is making these people take paycheck advances. There is nothing illegal going on. And if the consumer needs (wants?) an advance, at least they have the option available to them.

Re: Billionaires find loopholes in Payday Loan laws.

dfwxjer — Wed, 18 Feb 2026 19:43:03 GMT

I've never understood the burning desire for people to get paid 2 days earlier since, as you mentioned, the time between paychecks remains exactly the same.

Re: Billionaires find loopholes in Payday Loan laws.

AndrewF — Wed, 18 Feb 2026 23:01:24 GMT

@dfwxjer wrote:
I've never understood the burning desire for people to get paid 2 days earlier since, as you mentioned, the time between paychecks remains exactly the same.

Well, what happens is they need payday advances and then because they used one they need them again and again, and these companies realize that they can reap fees all the time because instead of managing the money so it lasts, people just come crawling back.

It's exactly like a payday loan shop in some seedy strip mall.

Re: Billionaires find loopholes in Payday Loan laws.

ptatohed — Thu, 19 Feb 2026 00:56:41 GMT

@AndrewF wrote:
@dfwxjer wrote:
I've never understood the burning desire for people to get paid 2 days earlier since, as you mentioned, the time between paychecks remains exactly the same.
Well, what happens is they need payday advances and then because they used one they need them again and again, and these companies realize that they can reap fees all the time because instead of managing the money so it lasts, people just come crawling back.

It's exactly like a payday loan shop in some seedy strip mall.

So, in theory if you gave them a free paycheck, they'd never have to take a loan again. I suspect they'd be right back to taking the loans within a month.

Did I understand correctly that the lady in the video said no to the tip but then opted for the $3.99 quicker deposit (as opposed to waiting for 1 - 2 days for no fee). Meaning, if she said no to the tip and took the 1 - 2 day longer transfer, there would have been no cost for the advance?

Re: Billionaires find loopholes in Payday Loan laws.

AndrewF — Thu, 19 Feb 2026 15:52:37 GMT

@ptatohed wrote:
@AndrewF wrote:
@dfwxjer wrote:
I've never understood the burning desire for people to get paid 2 days earlier since, as you mentioned, the time between paychecks remains exactly the same.
Well, what happens is they need payday advances and then because they used one they need them again and again, and these companies realize that they can reap fees all the time because instead of managing the money so it lasts, people just come crawling back.

It's exactly like a payday loan shop in some seedy strip mall.
So, in theory if you gave them a free paycheck, they'd never have to take a loan again. I suspect they'd be right back to taking the loans within a month.

Did I understand correctly that the lady in the video said no to the tip but then opted for the $3.99 quicker deposit (as opposed to waiting for 1 - 2 days for no fee). Meaning, if she said no to the tip and took the 1 - 2 day longer transfer, there would have been no cost for the advance?

Yeah, but it's about Dark Patterns.

It's a psychological nudge. It's called the nudge approach, you nudge people to do what you want them to, two or three times is all it takes, and most of them comply.

It said that 70-some percent just go ahead and give the "tip" and at least one app shames you if you don't as I stated, and then yes there's the fee if you need money right now, which is something most people who would use such an app do need.

But technically if you say not tip several times and wait a couple days, it might be free, maybe. So they didn't technically lie.

Traditional payday is much worse, those loans are basically designed so that you keep rolling them over and they accumulate 1000% interest, and there is no way to stop it eventually.

They cause bankruptcy but only started out as $500 or something.

Re: Billionaires find loopholes in Payday Loan laws.

ptatohed — Thu, 19 Feb 2026 16:39:13 GMT

@AndrewF wrote:
@ptatohed wrote:
@AndrewF wrote:
@dfwxjer wrote:
I've never understood the burning desire for people to get paid 2 days earlier since, as you mentioned, the time between paychecks remains exactly the same.
Well, what happens is they need payday advances and then because they used one they need them again and again, and these companies realize that they can reap fees all the time because instead of managing the money so it lasts, people just come crawling back.

It's exactly like a payday loan shop in some seedy strip mall.
So, in theory if you gave them a free paycheck, they'd never have to take a loan again. I suspect they'd be right back to taking the loans within a month.

Did I understand correctly that the lady in the video said no to the tip but then opted for the $3.99 quicker deposit (as opposed to waiting for 1 - 2 days for no fee). Meaning, if she said no to the tip and took the 1 - 2 day longer transfer, there would have been no cost for the advance?
Yeah, but it's about Dark Patterns.

It's a psychological nudge. It's called the nudge approach, you nudge people to do what you want them to, two or three times is all it takes, and most of them comply.

It said that 70-some percent just go ahead and give the "tip" and at least one app shames you if you don't as I stated, and then yes there's the fee if you need money right now, which is something most people who would use such an app do need.

But technically if you say not tip several times and wait a couple days, it might be free, maybe. So they didn't technically lie.

Traditional payday is much worse, those loans are basically designed so that you keep rolling them over and they accumulate 1000% interest, and there is no way to stop it eventually.

They cause bankruptcy but only started out as $500 or something.

I hear everything you are saying. I don't mean to sound cold but I guess, for me, I just don't have the same level of sympathy. The users of these apps are grown adults choosing to use them. McDonald's uses the nudge approach on me all the time. I often comply! I'm probably 8 - 10 lb overweight (closer to 195 when I should be closer to 185 lb). Do I blame McD? No, I blame me.

Re: Billionaires find loopholes in Payday Loan laws.

AndrewF — Fri, 20 Feb 2026 19:37:04 GMT

Yeah, I hate suggestive selling and it's not new, they used to have a person at the drive through asking if you wanted to super size the value meal for only 49 cents more.

It's not McDonald's job to keep you healthy, they measure productivity by year over year sales growth, net profit margins, and expenses like payroll, tax, utilities, and rent and franchising fees.

Anywhere they can make a sale, they will. If you want to come demolish three big macs in a row or add seven patties to your quarter pounder, that's an opportunity for them. And you're right, that you chose to tell them to sell it to you.

Me, personally, other than the Diet Coke I don't really go to McDonald's anymore. I love those more upscale burger places that will even do it on a lettuce wrap so you're not chowing down on a 300 calorie bun that's a "carb bomb".

Financial products are a bit different.

Many states realize how bad leaning on payday loans is and that it destroys families and leaves mom and dad unable to pay for housing or causes the electric company to come out for the meter when all the money is gone to interest. That's why McDonald's isn't all that regulated, but payday loans might be.

The Libertarian bent is you go to McDonald's you're hurting yourself, you go to Payday you're hurting your family.

Re: Billionaires find loopholes in Payday Loan laws.

AndrewF — Wed, 25 Feb 2026 00:51:53 GMT

Turns out that Dave Ramsey has commented on these, eight years ago, back when they were new.

Ramsey acknowledges that many people who seek out payday loans are broke, but correctly notes that if you're paying to take out money every day, you get a low paycheck and the fee, which is a terrible deal of course.

But then he states that the 12 million people getting payday loans (at least 8 years ago), it wasn't because they were all broke, they might be mishandling money, but they're not all broke.

Right, mishandling money goes way beyond the obvious of going out and getting a $80,000 truck with no down payment (because you can't make a down payment) at 12% interest, for 7 years. Although many people operate like that when they should be saving money.

It can be something as small as buying a cell phone that's too expensive (I mentioned cell phones that cost over $1200 when a $200 model might work fine.) or one of my favorites, going out to eat every night.

I remember when the restaurants closed because of COVID, and I was cooking every night, something good, for me and my spouse, at home, and the news said people might not eat because they didn't know how to get by without going by restaurants. And I was like "God help us, people have forgotten how to do everything."

Don't get me wrong, I love eating out and I do it a lot, with rebates on the dining cards, and my AARP discount, and loyalty programs. If you stack them all together, it can be...less expensive, but many don't even do this.

I was talking to my ex on the phone and he said "I might miss the rent this month." I said, "You have the cheapest landlord in that city and I guarantee you don't want to poke that bear. He'll come in, he'll inspect everything, he'll yell at you, and he'll remember you don't even have a lease. Why are you behind on rent?"

He goes, "Well J***** and I went out to eat last night and I spent too much money and now I can't pay my rent."

It wasn't just eating Chipotle for $57 a night, he financed a car at 12%, he did a lot of things. But his rent went late, and the landlord came in and inspected. The landlord yelled at them for their awful housekeeping, garbage everywhere, dishes in the sink, damage to a wall. They ended up having to move out and somehow got another apartment, that was $500 a month more expensive than the one they could have just stayed at.

I have a feeling that if they get "daily pay", they'd be the ones using it. I'm on a fixed income and my spouse works at a discount retail store, and we have ample savings, and investments. We also don't rush in to buy, much less replace, $1200 phones every year or two, finance 12% interest cars for 7 years. We're not perfect but we're not mishandling money to that level, so we don't rely on loans. Ever.

This isn't wage stagnation, mind you, my ex makes over $30 an hour working at a police department, and his spouse makes $25 an hour working at a municipal library.

Another story, real quick. Over 20 years ago, a guy I worked with said he'd quit to take a different job. I said, "Oh, you found one that pays more? Congratulations!" He informed me that it paid 25% less, but he was "paid weekly". I said, "So in the end you have less money." and he goes "But I get paid weekly!"

There's too many of these out there.