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PAYDAY LOANS SPR 2016 Payday Loans Requirements: A) Ethical Issue What is the ethical issue associated with associated with Payday Loans (in

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PAYDAY LOANS SPR 2016 Payday Loans Requirements: A) Ethical Issue What is the ethical issue associated with associated with Payday Loans (in general)? Identify and describe three main points that would support a Pay Day Loan's firms argument: (1) detailing why it should be allowed operate and (2) moving to a reservation is consistent with ethical behavior? Under what conditions, if any, should these firms be allowed to operate as non-banks? o Payday can be classified as loans a low-end disruption. These financial products target consumers with no or poor credit or live paycheck to paycheck (some military members) and charge them loan-sharking rates? 1. For example, in Missouri, payday lenders can legally charge up to $75 on every $100 borrowed, making the final interest rates on rollovers and multiple loans as high as 1,995 percent! These firms are not regulated as banks because they charge member fees. Should these firms be allowed to charge fees that are similar to loan-sharking rates? B) Ethical Decision-Making Using an ethical perspective to answer the following question: o Is relocation of Payday firms to Indian Reservations ethical? 1. Select a framework (see next page), 2. Explain why this framework best support the firm's perspective. 3. Discuss why the framework you selected is best suited to answer this question. o Is relocation of Payday firms to Indian Reservations ethical (A stakeholders' perspective such as a Veterans Group)? 1. Select a framework, 2. Explain why this framework best support Veterans Group's perspective. 3. Discuss why this framework is best suited to answer this question. o Select one option (Select one option and discuss) a) If you were Speaker of the House of Representatives: Would introduce allowing the FDIC to oversee Payday Loan Firms as banks or financial organizations? b) Would you allow these firms to operate without interference? Conclusion o As global competition increases at an advancing rate: Identify a Payday related challenge facing Veterans groups, consumer groups, and banking regulators 1
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PAYDAY LOANS SPR 2016 Ethical Frameworks An overview of the ethical decision making approaches is below: 1 1. The Utilitarian Approach: This approach focuses on doing the greatest good or the least harm to individuals or customers. This approach deals with consequences; it tries both to increase the good done and to reduce the harm done. 2. The Rights Approach: This approach starts from the belief that humans have a dignity based on their human nature per se or on their ability to choose freely what they do with their lives. The list of moral rights -including the rights to make one's own choices about what kind of life to lead, to be told the truth, not to be injured, to a degree of privacy. 3. The Fairness or Justice Approach: All equals should be treated equally. 4. The Common Good Approach: The Greek philosophers have also contributed the notion that life in community is a good in itself and our actions should contribute to that life. 5. The Virtue Approach: A very ancient approach to ethics is that ethical actions ought to be consistent with certain ideal virtues that provide for the full development of our humanity. These virtues enable us to act according to the highest potential such as: honesty, courage, compassion, generosity, tolerance, love, fidelity, integrity, fairness, self- control, and prudence are all examples of virtues. Virtue ethics asks of any action, "What kind of person will I become if I do this?" 1 htp://www.scu.edu/eThics/prac±cing/decision/framework.hTml 2
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Payday loans.edited.doc

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A payday loan is an unsecured and small loan that does not consider whether repayment
is related to the borrower's payday.
John accessed $ 800 from a lending...

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