The Politics of Payday: Why Netflix’s House of Cards and Payday Lenders Deserve Each Other
If you’ve ever had to deal with a payday lender, you know about predators.
And while neighborhood payday lenders may not have the social savvy of the Washington DC powerbrokers on House of Cards, they’re both deceitful operators willing to do anything to get what they want. So how else is House of Cards like a Payday Loan? Let’s break it down…
Netflix’s House of Cards returns for its fourth season today. If you’ve never seen the show, here’s a quick summary: it’s about predators. Front and center there’s Frank Underwood, Kevin Spacey’s ambitious, morally-compromised politician, and Frank’s wife, Claire. She’s a predator too, but one with a slight shred of conscience. She’s a shark who feels a little bit for the guppies — though she still finds them delicious.
So how are these animals like you’re neighborhood payday lenders? Let’s find out…
1. They’re in it for themselves
Frank Underwood is a man who uses others to get what he wants, regardless of the consequences. His path to the White House is littered with the bodies of people who were of better use to him dead than alive. Now, predatory lenders don’t go quite that far, but it’s the same general idea. It doesn’t matter if the person taking out the loan cannot pay it back; it doesn’t matter if that loan is going to trap the person into an endless cycle of debt; it doesn’t matter if that loan is going to land that person in the sights of a collection agency, in front of a judge or even in a jail cell. The payday lender is going to issue the loan because, either way, they can still make money on it.
At least they don’t push people in front of trains. Spacey’s got that corner all to himself.
2. They use tricks and set traps
The best example of this is “rollover”, a practice that would be perfectly at home in Frank Underwood’s bag of tricks. In fact, it’s like the financial incarnation of his right-hand-man Doug Stamper. But whereas Doug prefers trapping people in rural Maryland, rollover traps them in debt.
When a predatory lender rolls over a loan, they extend the expiration date in return for charging additional fees and interest. Now, since these are loans that come with high interest rates and short repayment terms, the likelihood that the customer will be unable to pay back the loan on time is high. And with rollover makes it all worse. Extending the term for a 14-day loan only gives the borrower an additional 14 days. That’s not a lot of time. Especially when you now have pay an additional 30% in interest.
It’s this ever-increasing amount of debt that traps the borrower underneath it; eventually they owe so much that they lose hope of ever repaying it. (Just picture Doug Stamper’s brown oxfords pressing down on a guy’s face and you’ll get the idea.)
3. They can be really hard to understand
If you’re a House of Cards fan, take a few seconds right now and try recalling all the various feuds, plotlines, random side characters and narrative dead ends. It’s not easy, right? Every new season brings down an inevitable avalanche of questions like “Wait–who’s that character again?” or “What did she do to him…or was it something he did to her?” (Cut to: frantic Googling.)
Trying to understand all the various ins and outs of a predatory payday loan contract can be similar. There are undisclosed fees and penalties. There’s impenetrable language and legalese. There are APRs buried deep in the fine print that disclose the loan’s true costs. It’s enough to make you feel like Peter Russo (remember him?) trapped in the clutches of…whatever Frank’s plan was at the time.
Just like House of Cards, one of the hallmarks of predatory lending is deception. And sometimes deception can be done by providing the borrower with all the relevant information, but doing it in such a way that the facts are difficult to comprehend. If Underwood were here, he would surely sum it all up with crude but folksy aphorism. But he’s not. And that’s because the main difference between House of Cards and predatory lenders is that House of Cards isn’t real. Predatory payday lending definitely is.
House of Cards makes for a pretty entertaining night (or weekend binge) of entertainment. Still, that doesn’t mean it’s a world you would like to inhabit. But when you take out a payday loan, you might as well be.
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