One of the effects of the alcohal ban in the 1920’s was that as people could not legally buy alcohol, an industry of illegal sale emerge which was controlled by the organized crime organizations.

This we all know made these organizations strong (remember Capone) as they had all the alcohol business and the government ultimately also lost income as they could not earn sale tax on the sale.

Now what CORE is saying is that if we ban the legal lending institutions proving payday loans, unsecured personal loans, where would people in need of a short term loan turn to? Their argument is that it would lead to an industry called “loan sharks” to emerge.

Well loan sharks is the nickname of illigal loan lending and yet again we would have a similar situation were an organized illegal and unregulated organization would handle a banned yet requested service such as unsecured personal loans.

This could become very ugly as these types of lenders don’t have a reputation of following normal civilized law and order.

Now, I agree with CORE that this industry should be allowed as it is a great service when in need of immediate cash to pay an unexpected bill. However what is important, in my opinion, is to use this service with care and not to take out these loans for Extra consumption. This will only lead to further difficulties next month as these loans needs to be repaid usually within 15 days. If one needs a loan for a longer period of time, then one should take out a secured loan such as a mortgage loan as the fee is lower and payback period longer.