You can find cash-advance businesses, pawnshops, and other high-interest lenders almost anywhere in Memphis these days. They're dressed up, well-marketed, and filling up strip malls from Midtown to East Memphis. They're a voracious and versatile species -- wolves in sheeps' clothing who are multiplying like rabbits.
Consumer advocates have reason to wage political war against these businesses. They levy astronomical interest rates and lofty fees on the most impoverished consumers. This only increases the debt burdens on these struggling debtors and further diminishes any prospect of their ever gaining a sound financial foothold.
As State Senator Steve Cohen says, Tennessee is a pro-business state to the point of being anti-consumer. And, unlike other states that have adopted stricter regulations and, in some cases, even outlawed certain types of high-interest lending, Tennessee is -- how to say it? -- Fringe-Bank Friendly. The state would almost seem to be trying to gain another dubious distinction -- Fringe-Bank Capital of the Country. As if Bankruptcy Capital weren't bad enough.
We're concerned about the individual consumer, but we also can't lose sight of the larger issue. A lack of strict regulation may attract fringe banks, but it's indigenous poverty that sustains them. While they're expensive -- nay, exploitative -- lenders, these well-financed predators are just snatching up a market that banks and other conventional lenders have left behind. Their customers have no place else to go for small loans and basic check-cashing services.
The fringe-bank issue is one more reason why we have to get a grip on the more substantive issues of poverty in our city, such as why Memphis leads the country in bankruptcies, why so many Memphians feel alienated by traditional lenders, and -- for that matter -- why it is that local payday dollars have such little stretch. Strict regulations are needed to protect consumers of fringe banks, to be sure. But that alone won't make the poverty problem go away.
We take comfort where we can around here. At a time when our ranking local officials are wasting more energy trying to sabotage each other than they are spending on the development of public works and services, we have found one area in which Memphis and Shelby County have something to crow about vis-a-vis the otherwise more efficiently run principality of Davidson County.
Yes, Mayor Phil Bredesen and the rest of Nashville officialdom (including temporary resident Don Sundquist, ex- of Memphis) collaborated well and seamlessly on baiting Bud Adams' erstwhile Houston Oilers into the Volunteer State. (Whereas our two mayors, Willie Herenton and Jim Rout, and our city congressman, Harold Ford Jr., probably couldn't cooperate on a simple child adoption; they'd tear the baby into three parts!)
But here's a thought: Nashville's crowd at their first exhibition game featuring the newly relocated Tennessee Oilers was scarcely larger than our own, at the Liberty Bowl two weeks ago. And (Bud Adams willing) they get to keep the team!
If they were the motel city and we were the homestead, we'd have filled up the Liberty Bowl, by damn!