Dow drops 240 on bank fears; gas eases to $3.96
CBS
Transcript
gas is still far from a bargain but prices keep slipping at the pump the Nationwide average for regular is now 396 a gallon that's according to AAA it's down about 15 cents from the record high we saw just a few weeks ago the Auto industry continues to respond to high gas prices General Motors will cut production by another 117,000 Vehicles because of weak demand for its gas hungry pickup trucks and SUVs on Wall Street stocks kicked on off the new trading week with a selloff the DOW Industrials tanked nearly 240 points the NASDAQ Composite fell back 46 banking stocks sparked the tumble that's after the international monetary fund said there is no end in sight to the housing slump the IMF warned that worsening credit conditions May prolong the economic slowdown yet another reason why the next president will inherit a record federal budget deficit the deficits expected to balloon to nearly $490 billion next year the sagging economy and stimulus payments going out to 130 million households are driving the shortfall and that's your money watch log on to cbsnews.com for more in New York I'm Alexis christopherus
Payday Loans Scrutinized
CBS
Transcript
want to go back now to the slow economy it has a lot of people struggling with their own finances about 2600 Americans have been filing for bankruptcy every day others are turning to a financial Quick Fix called payday loans they've now grown into a $59 billion industry but Six States have effectively banned these loans and tonight our chief investigative correspondent Arman Kayan looks at why today there are over 23,000 paid lending stores in the US more than Starbucks and McDonald's combined providing 19 million American households a quick way to make ends meet please borrow only what you feel comfortable paying back a typical customer takes out about eight payday loans a year in essence advances on their paychecks with interest rates approaching 400% a year for lower and middle class families with few Financial options such loans even at that price are a god Center but folks like Mary Bates now see something else a shortterm solution turned long-term trap and then cycle a dead end I would advise anybody not to for bats it all began with a $200 loan plus interest to fix her car but after paying it off 2 weeks later she couldn't afford to live on what was left so she took out another loan starting a 2-year cycle with a variety of payday lenders that ended up costing this a single mother of two what she says was more than $1,500 in interest to essentially float a $200 loan they're set there for people like me that live payday to Payday and then once you get in there you can't get out 15 to 20 minutes you can walk out with cash in your hand Terrence jent is one of eight former industry employees who spoke with CBS News a former district manager jent says payday lenders train their workers to set hooks incentives that offer to customers to get them to become repeat borrowers like take out five loans get the sixth one free or offering cash to managers of low-income apartments to refer desperate tenants and this document obtained by CBS News reveals that among the targets for this lender is single parent households with multiple children who are financially stretched we had people all the time that would come in and take out a loan to pay their retainer fee on their lawyers to file bankruptcy just look at the industry's own website we discovered that two of the customers profiled here actually declared bankruptcy partly due to multiple loans from payday lenders the service is very transparent there's no fine print there's no hidden fees did you know that two people on your website um have subsequently declared bankruptcy and they listed payday lenders as part of the reason that they were pushed over the edge but I think you'd find that payday lenders would be a small percentage of whatever debt um people have when they do declare bankruptcy it's not the loan Lindsay it's the interest on the loan that we're talking about what happens without the option of taking out a payday loan does someone is it better off if they bounce a check what what would you recommend that these people do I would do without electricity water whatever it would take until my next payday until I could pay I would not do it a long-term lesson about Instant Cash bites hopes others won't learn the hard way Armen Kayan CBS News Pinnacle North Carolina