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Comment by zaroth | Hacker News Reader

Holy shit, this is totally insane.

The worst part is, is that there is a viable market for short term business loans that don’t involve APYs over 300% or loan snarking, or counterfeiting legal documents, or plundering unrelated accounts, or exploiting every legal loophole known to man and lining the pockets of NY “marshals” while you’re at it.

The level of corruption is mind boggling. I’ve often wanted to learn more about the industry and was very interested in the rise of P2P lending, but when you have to compete with scum like this, obviously that makes it near impossible.

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> The worst part is, is that there is a viable market for short term business loans that don’t involve APYs over 300% or loan snarking

Yes, there is... but there are still people who those reputable lenders won't do business with because the risk is too high for the return. Those high risk people are the ones these predators are lending to.

Are you saying there already is, or that there should be, a non-predatory market for short term business loans? Like OnDeck?

There are already companies that offer short term business loans where you borrow against your receivables. This helps companies make regular payments for mortgages and payroll when their receivables are unpredictable. Without these sorts of loans businesses would not be able to function.

The thing is... if you forbid unethical lending, then organized crime fills in the gap. And when you can't pay the mob, they don't take you to court, they take your knee caps.

Just like making drugs illegal doesn't make them go away, making unethical lending illegal doesn't make it go away either. To me, this is "harm reduction" of financial services. Yes, it's bad, but not as bad as leaving it on the black market.

But if it's being done by the mob, the police and the courts are on your side; in this case, the courts are against you, and the police can only shrug and say, "Tough luck.". I'd rather have inarguably predatory lending be on the wrong side of the law, even if it can't be eliminated.

You've been watching too many movies.

Organized crime is way down, compared to what it was in the past. It just isn't a problem anywhere in America

But, you can do things like making arbitration or assumptions of guilt illegal in contracts. Also, limiting effective APR to a reasonable extreme goes a long way too.

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