Payday Loans Equal Very Costly Cash

The ads are on the radio, television, the Internet, even in the mail. They refer to payday loans, cash advance loans, check advance loans, post-dated check loans, or deferred deposit loans. The Federal Trade Commission, the nation’s consumer protection agency, says that regardless of their name, these small, short-term, high-rate loans by check cashers, finance companies and others all come at a very high price.

Here’s how they work: A borrower writes a personal check payable to the lender for the amount the person wants to borrow, plus the fee they must pay for borrowing. The company gives the borrower the amount of the check less the fee, and agrees to hold the check until the loan is due, usually the borrower’s next payday. Or, with the borrower’s permission, the company deposits the amount borrowed — less the fee — into the borrower’s checking account electronically. The loan amount is due to be debited the next payday. The fees on these loans can be a percentage of the face value of the check — or they can be based on increments of money borrowed: say, a fee for every $50 or $100 borrowed. The borrower is charged new fees each time the same loan is extended or “rolled over.”

The federal Truth in Lending Act treats payday loans like other types of credit: the lenders must disclose the cost of the loan. Payday lenders must give you the finance charge (a dollar amount) and the annual percentage rate (APR — the cost of credit on a yearly basis) in writing before you sign for the loan. The APR is based on several things, including the amount you borrow, the interest rate and credit costs you’re being charged, and the length of your loan.

A payday loan — that is, a cash advance secured by a personal check or paid by electronic transfer is very expensive credit. How expensive? Say you need to borrow $100 for two weeks. You write a personal check for $115, with $15 the fee to borrow the money. The check casher or payday lender agrees to hold your check until your next payday. When that day comes around, either the lender deposits the check and you redeem it by paying the $115 in cash, or you roll-over the loan and are charged $15 more to extend the financing for 14 more days. If you agree to electronic payments instead of a check, here’s what would happen on your next payday: the company would debit the full amount of the loan from your checking account electronically, or extend the loan for an additional $15. The cost of the initial $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

More cash for council homes

The Scottish Government today announced an additional £25 million to support the construction of local authority homes.

The money, which is expected to support 3,000 jobs, takes the total government investment in council house building to £50 million, the most spent in 30 years.

Just last week the Scottish Government announced the first 14 councils to benefit from the fund when almost £17 million was allocated. Work is currently underway to allocate the remainder of the cash as quickly as possible.

Announcing the additional investment today, Cabinet Secretary for Health and Wellbeing Nicola Sturgeon said:

"The Scottish Government is investing record amounts in affordable housing, more than 1.5 billion pounds over three years, despite the tightest settlement from Westminster since devolution.

"These are hard times for businesses and families across Scotland and this government is working hard to meet this challenge, safeguard jobs, support the construction industry and keep the economy moving.

"In the Scottish Government's first year in office, more public sector homes were started than at any time since the early 1990s.

"The announcement of additional funding today will help local authorities to continue to reverse the decades of decline in council house building, providing people and their families with access to good quality homes that they can afford."

The council house building fund is just one part of a wider package supporting affordable housing in the economic downturn. Already the Scottish Government has:

• announced a record £644 million for the affordable housing investment programme this year

• extended the open market shared equity pilot to cover the whole of Scotland, backed by £60 million

• announced its intention to legislate to end the right to buy on all new build social housing

• launched the £35 million Homeowners Support Fund which helps households in financial difficulty

Christmas in Korogocho: How DFID cash helps children in Kenya's slums

Christmas 2008 has now come and gone. In the UK, most children got excited about Christmas, whether they had lots of wishes and expectations, or only one.

Kenyan children have wishes too. Meet Margaret Wamboi, who is 13 years old. Orphaned by AIDS, she lives in the slum of Korogocho in Nairobi. It's not a pretty place. In fact, 'Korogocho' means 'dumping-ground' in Kiswahili. So, what was Margaret's Christmas wish?

"My dream is to find a sponsor who will help me go to secondary school" she says. The evening we spoke to her she'd just finished her last day of primary school. Primary education is free in Kenya but Margaret knows her family doesn't have enough money for secondary school fees. Margaret's big sister Wahu, 16, looks after her and five other children also orphaned by AIDS. Wahu's dream, too, is that her sister Margaret is able to continue her education. "The biggest Christmas present for me that I would love, would be for the children all to go to school." Click on the video (right) to hear Margaret and Wahu's story.

The fact is that most children in Korogocho - a dangerous and unforgiving place inhabited by some 300,000 of the poorest, most desperate people in East Africa - will not get a present this Christmas. But, as journalist Alex Renton reports, DFID, Unicef and the Kenyan government are working together to give these and other orphaned and vulnerable children small amounts of cash that will help realise their wishes for the future.

Steam engine

In simple terms, it is the vapor released when water is heated to the boiling point. Both colorless and odorless, this vapor can provide a powerful source of energy and pressure. During classical times, man began to experiment with harnessing the power of steam. Greek engineer Heron (or Hero) of Alexandria developed a simplified steam device called an aeolipile or "wind ball" in which steam power caused a ball to revolve. Although Heron thought of this rotating device as a novelty or toy, the design principle he used is similar to that of today's jet propulsion. In 1679, French mathematician and physicist Denis Pepin invented a type of pressure cooker called the steam digester - an early forerunner of the autoclave. Serious efforts to harness steam power were made in 17th century Britain when it became necessary to pump floodwaters out of coalmines. In 1698, Thomas Savoy patented a crude steam engine that accomplished this task. In 1712, Thomas Newcomen improved upon his partner's idea with the development of an atmospheric steam engine. Enter James Watt, Glasgow scientist, depicted in the image below in his shop. A Newcomen engine was brought to him for repair, and his experiments and improvements resulted in his 1769 patent that ultimately became the dominant steam engine design of the times. The first effective high pressure steam engine in the United States was designed and built by a little known Delaware inventor, Oliver Evans. His 1801 invention, detailed in the 1893 lithograph above, is largely responsible for America's industrialization in the 19th century. Steam engines were adapted to power early locomotives, steamboats, fire fighting equipment and factory machines; even though more sophisticated power methods have evolved, steam engines are still used for power generation today.