A Slew of Credit Crunch Musings..

Megan McArdle has a huge post of some digested thoughts after a consumer credit conference this past week. The whole post is worth reading.

The part that made me chuckle most was this section of her post:

3) The moral panic also extends to people who meet those needs: we view paycheck lenders as in broadly the same class as pimps, casino owners, and drug dealers. Particularly disturbing seems to be the notion that people make profits providing money to the poor. Yet there's little evidence that payday lenders make especially high profits; even non-profits who try to get into the business have found themselves charging interest rates they previously regarded as usurious. Poor people are, in fact, poor lending risks; the high interest rate compensates for the high default rate.

..when followed by this comment:

I find it odd that if you offer loans with high interest rates to Bangladeshis, you win the Nobel peace prize. If you do the same for... name your far more local constituency... you get vilified.

(Glances in the direction of Dr. Yunus and Grameen Bank...)