Last month, we reported that players without strong credit ratings or significant collateral could get through the lockout via loans with interest rates as high as 22 percent.
Yahoo! Sports’ ThePostGame.com reiterates and expands on the concept with a recent item explaining that the interest rates will range from 18 to 24 percent, with rates as high as 36 percent upon default.
“There are a lot of people out there pitching these things,” an unnamed attorney told ThePostGame.com. “It’s almost predatory lending. It’s people going to guys who they know are already in debt, or don’t have the ability to pay their bills during the year and [lending them money] at such obscene terms, that you say, ‘Hey, no one would ever sign something like this.’ But a lot of players are.”
They are because they need the money to get through the lockout.
“I know at least 16 different teams that have had players go out and have to set these [high risk loans] up,” an unnamed financial advisor told ThePostGame.com. “Guys on the Dolphins, Saints, 49ers, Panthers, Chargers, Bears, Vikings.”
The financial advisors end up cashing in via the various transactions that the loans will spawn, including fees for setting up the loans, fees for the sales of disability insurance that ensures repayment in the event of injury, and other financial transactions related to and arising from the players’ need for money.
“Sounds like total B.S.,” Cardinals kicker and NFLPA representative Jay Feely told ThePostGame.com. “I think it’s predatory and unjust. I don’t think they should be charging those interest rates and I would encourage every player [considering high-risk loans] to look elsewhere. I think if you went to your bank, or outside lending agencies, you’re not going to pay that kind of interest. That’s absurd.”
The problem is that plenty of players don’t have the collateral or the credit history to justify a conventional loan. And, as we pointed out last month, the players who have been sufficiently responsible to accumulate collateral and/or strong credit ratings likely have saved enough money to carry them through the lockout.
The issue puts the NFLPA* in an awkward position. On one hand, the union-turned-trade-association needs to protect its individual members. On the other hand, any transactions that help keep the players united in the face of a potentially protracted lockout helps all of them, even if it means that the players who rely on the high-interest loans to get through the lockout eventually will have to come up with a lot of cash to pay off the debts — or try to figure out how to wipe properly with two broken thumbs, Jon Jansen-style, after a visit from the pre-Creed Rocky Balboa.