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Web posted February 19, 1998

Augusta Chronicle Editorial Staff

In South Carolina, unregulated video poker parlors prey on the financial vulnerabilities of society's poorest citizens. In Georgia, the unregulated ``small loan industry'' does the same thing.

In the name of ``helping'' financially strapped Georgians who can't get credit anywhere else, the estimated 160 cash-advance businesses ``servicing'' low-income communities across the Peach State offer short-term loans against signed personal checks and, for their troubles, collect a usurious 15 to 30 percent interest rate every two weeks.

In a very short time, a $100 borrower can find himself several hundred dollars in hock to the loan company -- with the clock still ticking. This legalized loan-sharking is no less an unconscionable ripoff of poor people than is video poker.

To be sure, the loan industry defends itself on grounds that it is providing a vital service to ``working class'' people who can't get credit through established borrowing channels.

Providing credit at usurious rates is certainly doing them no favors. That's why state Sen. Don Cheeks, D-Augusta, introduced S.B. 590 to put the sharks out of business. ``They are not regulated and they pay no licenses,'' says Cheeks. ``Why should they be allowed to rip people off?''

The industry whines to lawmakers about the ``small family businesses'' that will go belly up if Cheeks' bill passes. Yet one wonders if these ``family businesses'' are as concerned about their customers' financial well-being as they want the General Assembly to be about theirs.

The other tack is to ask for regulations. This strategy is also like that of video poker in South Carolina. As its excesses became widely known, the gambling industry decided some regulation was preferable to being run out of the state -- and so it is in Georgia with the loan shark industry.

The time couldn't be better to confine both these predatory industries to the scrap heap. With the economy healthy and unemployment at near record lows, laid off workers should have little trouble finding honest jobs.