139% interest rate?! Crushing quick-loan rates turn $2,500 debt to nearly $14K

[Admiral Yi]

It is because they are Canadian, right?

That neither.

[crazy canuck]

Oh sure, answer Ed's questions but not my simple question.

[Ed Anger]

I'm nice.

[Admiral Yi]

Oh sure, answer Ed's questions but not my simple question.

I answered your question.

[Jacob]

Especially when it's so profitable to lead people into those disasters.

What?

Allowing extremely predatory lending practices (5000+% interest, $2500 principal turning into $14K in short order as per the OP) increases the amount of disaster you get from the recipe of the financially illiterate, the ignorant, and the foolish borrowing for consumption purposes.

You can't, however, expect predatory lenders to refrain from such practices, nor to refrain from soliciting as many marks as possible for their business, since they make good money from the transactions.

Thus better regulation, partially aimed at curtailing predatory practices, is the answer if you want to reduce the amount of disaster that's being cooked up.

[Admiral Yi]

Gotcha.

[DontSayBanana]

Yep, here in the lower mainland municipalities created regulations requiring pawnshops to obtain the identity and address of the people providing the goods and keep that information on record; to keep the goods for a specified period of time (to allow any proceeds of crime to be identified before it was sold); and to require the pawnshops to advise the police if they recieved certain items (having mostlly to do with value of the goods). 

It had a dramatic impact on decreasing the amount of stolen goods recieved by pawnshops and the rates of home robberies.

Can't speak for other states, but NJ requires proof of identity, each item must be logged and made accessible to the New Jersey State Police, and there's a two-week moratorium on selling pawned property to give NJSP a chance to check it against stolen property claims.