Payday lenders to face new regulations

[Omaha Steve]

Source: AP-Excite

By JOSH BOAK

WASHINGTON (AP) — Payday lenders are facing new federal regulations aimed at preventing low-income borrowers from being buried by high fees and rising debt loads.

The Consumer Financial Protection Bureau will unveil a set of proposed rules on Thursday. President Barack Obama is also expected to use an afternoon speech in Birmingham, Alabama, to address the plans to oversee the payday sector and efforts by congressional Republicans to limit the bureau's authority.

Borrowers barely getting by on low paychecks have increasingly relied on storefront and online lenders, prompting the federal government to set standards for a multibillion dollar industry that has historically been regulated at the state level.

The loans' steadily compounded fees have overwhelmed some borrowers, causing them to lose their bank accounts and their cars — and even risk prison time. The regulations are designed to ensure that debts can be repaid, instead of plunging borrowers into worse circumstances.

FULL story at link.


Read more: http://apnews.excite.com/article/20150326/us-cfpb-payday-lending-def45b4486.html

[hedda_foil]

1. CFPB. Thank you, Elizabeth Warren and thanks to you, Steve, for bringing us this great news!

It's a ray of hope in this after sundown time.

[d_legendary1]

2. Happy to see the Feds doing what the states are supposed to do

In Flordia we have Amscots all over the place! My God daughter's mother used to walk into those places to take out $500 and repay $551 the next paycheck if she made the payment on time. Miss a payment and its fee city. They also post an APR schedule which starts a 300% or so (not sure for what purpose). I'm glad she moved to Jersey and got herself a great paying job, but those places need to be regulated for the average joe.

[Cryptoad]

21. I dont know about anywhere else....

but here in Alabama , if you dig deep enough ,you will find that most of these places are owned by politicians.......

[d_legendary1]

23. Rick Scott is in the Pill Mill business

So your assumption about politicians owning some of these places is not that farfetched.

[mountain grammy]

3. This is a start, but should go further.

these loan sharks should be out of business along with the private probation companies that are ruining the lives of American citizens. It's criminal what the corporations get away with, and, as we speak, I'm sure they are finding every loophole in this new law. The entire operation should be illegal.

http://www.democraticunderground.com/10026411369

#shutdownthefuckbarrel

[Larry Engels]

8. Good, but---

Poor people need some source of credit. So there needs to be rigorous regulation of the industry. Getting rid of it entirely might be over-the-top.

[onethatcares]

10. we need the post office

to offer banking.

[mountain grammy]

13. Yes, and there has been some very common sense

talk about allowing the Post Office to partially fill this need. Also, the payday loan sharks must be heavily regulated. This is another example of lawmakers doing business with their donors instead of protecting constituents. Disgusting.

[Larry Engels]

15. I know other countries have post office banks, but---

How would that help this situation? Do they provide short term loans? Do you have to have good credit to get one? What if you default? Etc.

[mountain grammy]

17. People must have access to some kind of banking

and all people deserve to be protected from predator lenders who prey on vulnerable people. Regulations must be tighter, and for simple check cashing, etc, the post office could fill a need.

[greiner3]

22. Over the top for whom????????????

Minimum wages need to be raised to a living standard so land sharks such as these types of businesses have 0% for existing.

[raven mad]

26. I agree, Larry. Welcome to DU.

I had to use one of these ripoff artists once, was out of a job and the unemployment check of $102 every 2 weeks just wasn't cutting it. I needed to buy cat food and milk.

Had to repay about 25% more than I'd borrowed - after only 3 days. I did get the cat food. Used the rest to help repay. Regulate the hell out of 'em. According to two folks I know who are "in the business", their primary borrowers? Military. Yep.

[christx30]

4. Next we need to regulate

municipalities from charging their fees and ridiculous court fees from minor infractions. Saw a piece John Oliver did about these places that outsource(which should be illegal) ticket and fee collection. A $35 ticket, if not paid right away, can end up costing you $1000 or more after these vultures get ahold of you. And if you're living paycheck-to-paycheck like most Americans, that can cost you your car, your job, and put you in jail. We heard those horror stories from Ferguson. It happens everywhere else too.

[Kelvin Mace]

5. Bring back usuary laws

cap interest at 18% (including all fees).

[cali]

19. Vermont caps it (including fees) at 12%. And it aggressively goes after

the fucks who break the law.

[Kelvin Mace]

20. Outstanding!

I was being too generous.

[groundloop]

6. Wait... I can hear it building..... here comes republican outrage at govt. interference

Those payday lender scum need to be highly regulated, if not driven out of business altogether. I'm absolutely certain that they'll be lobbying their republican friends to help them get around these regulations.

[awoke_in_2003]

24. Yep, they are nothing but legal loan sharks. nt

[angrychair]

7. #shutdown the fuckbarrel. N/T

[Kingofalldems]

9. There is a difference between republicans and Democrats.

[Dont call me Shirley]

11. New Mexican legislature continuously knocks down anti-predatory loan laws.

http://assetsandopportunity.org/scorecard/assets/NM_2015_Scorecard_Release.pdf

[Cryptoad]

12. Are you kidding me,,,,,,

now they can not charge over 40% APR,,,,,,,,,even that use to be considered loan sharking,,,,,, and I will not even get in to being an abomination as written in the Bible.

geeez!

[herding cats]

16. What's the saddest part is that would be a 300% reduction. nt

[olddots]

14. I never saw a pay day loan place untill 2000

shortly after the sellection of Shrub .

[cali]

18. I like the payday lender laws in my state: The fuckers are BANNED. Illegal.

http://vtdigger.org/2014/04/23/vermont-attorney-general-wins-1m-settlement-payday-lenders/

[one_voice]

25. My sister looked into one of those places...

it gave you a little longer to pay back. Like 6 months. She wanted $500. The total she would have paid back was $2600.

I don't know how that's legal. It's legalized loan sharking.