In his introduction to the segment, Oliver is stunned to learn that there are more payday loan stores in the U.S. than there are Starbucks and McDonalds.
“McDonalds! Oliver marveled, “I didn’t know there was more of anything in the U.S. than McDonalds, including people and grains of sand.”
Payday loans is a $9 billion industry preying on the most vulnerable members of society, people who typically have low paying jobs and barely get by before incurring debt that legally carries interest rates as high as 1,900 percent annually. They get away with these usurious rates because they are not supposed to be long term loans which take years to pay off, they are technically short term loans, thus the name, “payday loans.”
As Oliver goes on to note, the business model depends on trapping the borrower in an endless cycle of paying off one loan and then being forced to take another in order to get through the next week, having signed his paycheck over to the
loan shark payday loan company.
Never one to be unfair, John goes on to tell us that not all of these companies are this shady:
“Obviously, we must not generalize about this sh*tty industry, some companies hold themselves to a higher standard, in fact, the Community Financial Services Association of America insists that their members are different from the shadier elements of the industry. They even brag about it in one of the most boring videos on the internet.”
Since their members are so superior to the “shady” companies in the industry Oliver takes a look at some of these “ethical” companies.
First he looks at Advance America, one of the largest of these companies which justifies their business practices by saying that “the consumer demand for the product is overwhelming.” As Oliver notes, there is an overwhelming demand for heroin as well but people don’t generally recommend that their friends take heroin to get themselves out of a tight spot.
Mere words cannot do justice to Oliver’s evisceration of the way the industry gets around any legislation that regulates them.
The segment ended with Sarah Silverman doing a PSA telling people what to do when they are thinking of taking a payday loan and it is so simple — “instead of taking out a payday loan you literally do anything else.”