• Sat. Oct 1st, 2022

If you must be immoral, be honest

ByCindy J. Daddario

Sep 12, 2022

Payday lenders are hated by many, and it’s understandable. I have mixed feelings about them, though. They make money off a societal failure that feels very avoidable: millions of Americans live paycheck to paycheck and can’t afford an emergency. Higher wages and an improved social safety net could make these institutions obsolete, but no one in power seems interested in making that happen. As such, payday loans can be viewed as an unnecessary “necessary evil.” Getting rid of them without making the above changes would hurt those who don’t have alternative ways to make quick money. That’s where payday lenders hang their hats: It’s terrible, but it’s honest. So I can imagine – and wish – for a world without payday lenders, and I have a vague idea of ​​how society is getting there. Earnin is a company born into a new generation of “quick cash solutions” and you have to think they are ethical. Something about it makes me deeply angry, not only with the company but also with the culture that has produced it.

From the way Earnin presents itself, you might think it’s either a charity or a mutual aid fund. For example, they boast that there are no fees for using the app and no interest is charged on the borrowed money. Instead, they rely on a system of purely voluntary tips to keep themselves afloat. They call it “giving back to the community”. According to NBCsuggest that you tip about 10% of the amount borrowed.

It almost sounds cozy. All this talk about volunteerism, community and mutuality might make you overlook what 10% interest on a short-term loan looks like. If you pay that back in a week, which is a long time for a payday loan, 10% works out to an annual percentage rate (APR) of 521.43%. Unless you live in Texas, Nebraska or Idaho, that is a worse deal than your average payday loan. If a friend wants $10 back after I borrow $100, I might just give it to them. That feels kind of fair. And most of all, Earnin tries to think of you as a friend.

Here we see the subtle toxicity of “giving back” to Earnin. Have you wondered how this company got seed capital? I suspect they had done extensive research showing that most people would “give back” to a company with their brand marketing. You’ve probably realized that in most people’s minds, $5, $10 feels like a reasonable tip, even if it isn’t. Additionally, this model allowed them to avoid being classified as a payday lender and exempt them from regulation, which is a very nice value proposition. Some might call it cynical, manipulative, maybe even evil. That’s before we point out the requirement that they follow you all the time (to make sure you’re working). And that’s on top of their access to your bank account, which has allowed them to send clients into overdrafts so often They faced a class action lawsuit (although they do offer to pay overdraft fees). So we see that behind the blurry exterior lies a horrible company that’s every bit as exploitative as its predecessors. I remember the expression “wolf in sheep’s clothing”.

Still, Earnin insists it’s built around it “Don’t Leave People Behind” and claims to be backed by a strong, diverse community. What that does is add insult to injury. Earnin’s CEO claims he came up with this solution when his employees at another company couldn’t pay their bills. Offering them cash became proof of concept for Earnin. Until then, I couldn’t help but ask, “If your employees can’t pay their bills as often, why not pay them more instead?”

And here I direct my dismay at society at large. Earnin feels like performance art in his absurd attempt to recast payday loans as activism. It could serve as a satire on a problem I see popping up everywhere, namely: our need to always feel like the choices we make are moral, even when they’re not. The way I see it, this impulse drives us in one of three directions whenever we choose to act against our moral compass. It gives us 1) imagining that we have no choice, although we often do, 2) imagining that this is the most moral choice we could make when that is seldom the case, and 3) deciding whatever problem we are contributing to doesn’t actually exist.

In Earnin’s case, we see an attempt to make payday loans ethical, or at least make them look like it. There is a belief in Earnin’s messages that poverty is a fact of life, that there will always be a market for lending to the desperate, and that they will be the nicest people around. Unlike traditional payday lenders, they make you feel like their existence is inevitable, there is no better world imaginable. You feel powerless and they comfort you with the fantastic idea that they can make money off the poor people’s struggles without doing any harm. The poverty of imagination combined with the wealth of illogicality is depressing. It’s like seeing a 10 foot wall and praying you fly over it and ignoring the open door 10 feet away.

We see that everywhere. In fact, payday lenders are honest only because they’ve been a media pariah for at least a decade — they can’t help but acknowledge the truth. In Duke’s case, we can think about how people are “sold out.” Ultimately, most of us justify this by saying we have no other choice, proclaiming that we’re “built differently,” or finding ways to imagine how we could get the job done without the moral hazard involved. Nobody wants to admit that they’re making a choice that’s in any shade of gray.

What is the consequence? Look to Earnin: In our need to always be “good, actually,” we refuse every opportunity to reflect on the choices we make. An ethical short-term lender can’t exist, it’s almost a contradiction in terms, so Earnin envisions a world where that can happen: a world where poverty will never go away and where there is no moral hazard, one charging an APR of 500% from a poor man. Without self-deception, how can someone who makes dire decisions present themselves as perfectly moral? One might even point out that if we accept living in an unjust society we are failing to be moral every day, and that to think otherwise is also an act of deception. The consequence of this self-deception is clear and terrible: we shut down the possibility of changing the world for the better.

Finally, if it is unbearable to hold a questionable job or work in a questionable institution without believing that you are a “good person,” then you must find ways to ignore or deny moral hazard. At this point, how do you become part of the solution? You either don’t believe the problem exists, or you convince yourself you’re already doing your best! Change is impossible without reflection and honesty with yourself.

Then what is the cure? I think we have to learn to accept that we can’t be uniquely good. At the end of the day, it is almost impossible to avoid engaging in any form of injustice. Almost every day, we make reasonable – if unreasonable – decisions that run counter to our ethics. To give an example, we really should be pushing for climate legislation every day, but most of us have other things that concern us more. This does not excuse wrong choice, nor is it an invitation to nihilism. Rather, it is a call to admit that we are all hypocrites to varying degrees and that we must continue to question why we are not doing more.

Admitting without reservation that you are making a selfish decision keeps the door open to change. At some point you will be able to decide that you can or must get better. Until then, honesty will keep you sane. Wanting to be the hero will make you distort your worldview, your beliefs about reality and morality into something unrecognizable just so you can get out of bed. If you have to be a “good person,” you will adopt the language and spirit of activism and clumsily force them to agree to your work. Having to think like this leads a college boy to write a column expressing his dismay that you just called payday an exercise in mutual aid.

Dan Reznichenko is a Trinity junior. His column runs alternately on Mondays.

Dan Reznichenko
| Opinion Editor

Dan Reznichenko is a Trinity Junior and Opinion Editor of Volume 118 of The Chronicle.