If you must be immoral, be honest

Payday lenders are understandably hated by many. However, I have mixed feelings about them. They make money from society’s failures and feel very avoidable: Millions of Americans live on paychecks and can’t afford emergencies. Higher wages and an improved social safety net could eliminate the need for these institutions, but no one in power seems interested in making it happen. In this sense, payday loans can be seen as an unnecessary “necessary evil.” Repeating them without these changes would hurt those who lack other ways to get quick cash. That’s what payday lenders insist: It’s scary, but honest. So I can imagine – and hope – a world without payday lenders, and I have some idea of ​​how society got there. Earnin is a company from a new generation of “fast cash solutions” who need you to think they are ethical. This makes me viscerally uneasy, not only for the company, but also for the culture that produced it.

The way Earnin is presented, you’d 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 on the money you borrow. Instead, they rely on a purely voluntary tipping system to make ends meet. They call it “giving back to the community.” According to NBC, they recommend that you tip around 10% of the amount borrowed.

Sounds lovely, almost. All this talk of volunteering, community, and reciprocity might make you lose sight of what 10% interest on a short-term loan looks like. If you pay it back in a week, which is a long time for a payday loan, the 10% annual interest rate (APR) is 521.43%. Unless you live in Texas, Nebraska, or Idaho, that’s worse than your average payday loan. However, if a friend wanted $10 back after I borrowed $100, I might just pay them back. It feels kind of fair. And Erning, most importantly, tries to get you to consider them as friends.

It is here that we see the subtle toxicity of “giving back” to Erning. Do you want to know how this business got its start-up capital? I guess they have done extensive research showing that most people want to “give back” to a company with their brand marketing. They may think $5, $10 is a reasonable tip in most people’s minds, even if it isn’t. Most importantly, this model allows them to avoid being classified as a payday lender, thereby exempting them from regulation, which is a very good value proposition. Some might call it cynical, manipulative, or even evil. That’s before we point out that they keep track of your requests (to make sure you’re working). This is based on their access to your bank account, which allows them to overdraft customers so often that they face a class action lawsuit for it (though they do offer to pay overdraft fees). Then, we see that behind the nebulous facade is a terrible company, every bit as exploitative as their predecessors. I am reminded of the phrase “wolf in sheep’s clothing”.

Still, Earnin insists it’s built around “not leaving people behind” and claims to be backed by a strong, diverse community. Doing so will make things worse. Earnin’s CEO claims he came up with the solution when his employees at another company couldn’t pay their bills. Giving them cash becomes Earnin’s proof of concept. By then, I couldn’t help but ask, “If your employees can’t pay their bills as often, why not pay more?”

This is where I turn my fears broadly to society. Earnin’s absurd attempt to redefine payday loans as activism feels like performance art. It serves as an irony to a problem I see everywhere, namely: We need to always feel that the choices we make are moral, even if they are not. In my opinion, this impulse pushes us in one of three directions whenever we choose to go against our moral code. There are 1) imagining that we have no choice, although we often do, 2) imagining it is the most ethical choice we can make, which rarely happens, and 3) deciding that we are contributing to any problem doesn’t actually exist.

In Earnin’s case, we’ve seen attempts to make payday loans ethical, or at least describe them as ethical. Implicit in Earnin’s message is the belief that poverty is a fact of life and that there will always be a market for loans to the desperate, so they will be the best in that field. Unlike traditional payday lenders, which make you feel like their existence is inevitable, there’s no better world than you can imagine. You feel powerless and they console you with a whimsy that they can make money from the struggles of the poor without causing harm. The lack of imagination, combined with the illogical wealth, is frustrating. It’s like seeing a 10-foot wall and praying you can fly over it, ignoring the open door 10 feet away.

We see this everywhere. In fact, payday lenders are honest only because they’ve been media pariahs for at least a decade — and they have to admit the truth. In the case of Duke University, we can consider the ways in which people “sell out.” Ultimately, most of us justify it by saying we have no choice, declaring that we are “inherently different,” or finding ways to imagine doing the job without any moral hazard. No one wants to admit that they are making some grey choices.

What are the consequences of doing so? Look at Erning: We turn down every opportunity to reflect on the choices we make when we need to be “actually good” all the time. It’s almost paradoxical in terminology that moral short-term lenders can’t exist, so Earnin reimagines a world where this could happen: a world where poverty never goes away, and requires 500% APR that no moral hazard comes from a poor man. How can anyone who makes vague choices see themselves as completely moral without some self-deception? One might even point out that it is an illusion to accept that living in an unjust society where we cannot be moral every day and thinking otherwise. The consequences of this self-deception are obvious and dire: We rule out the possibility of making the world a better place.

After all, if it’s intolerable to work in questionable jobs or be involved in questionable institutions without believing you’re a “good guy”, then you have to find ways to ignore or deny moral hazard. How did you become part of the solution then? Either you don’t believe the problem exists, or you’ve convinced yourself that you’re already doing your best! Change is impossible without reflection and being honest with yourself.

So, what is the antidote? I think we have to learn to accept that we can’t do it unequivocally. At the end of the day, it is almost impossible to avoid participating in some form of injustice. Almost every day, we make understandable—though not justified—decisions that go against our ethics. Case in point: We really should be pushing climate legislation every day, but most of us have other things we’re more worried about. This is not an excuse for making bad choices, nor is it an incentive for nihilism. Instead, it calls for acknowledging that we are all hypocrites to varying degrees and that we must continue to question why we are not doing more.

Unconditionally admitting that you are making selfish choices opens the door 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 a hero will make you warp your worldview, your beliefs about reality and morality, into something unrecognizable so you can get out of bed. The need to be a “good guy” will see you take the word and ethos of activism and embarrassingly force them to agree with the work you do. Having to think about it this way is how you ended up getting a college student to write a column expressing the fear you just called the payday lending mutual aid exercise.

Dan Reznichenko is a Trinity Junior. His column alternates every Monday.

Dan Reznichenko
| Editor-in-Chief

Dan Reznichenko is a junior at Trinity and the opinion editor for volume 118 of The Chronicle.

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