Reply #61: Payday lenders craft user protections [View All]

[AnneD]

WASHINGTON — Under siege by state regulators, payday lenders unveiled voluntary consumer protections Wednesday, including giving some borrowers more time to repay loans and ending ads promoting the product for "frivolous purposes," such as vacations.
The proposals will "greatly reduce the risk of any customer getting caught in a new cycle of debt," says Don Gayhardt, president of Dollar Financial, which operates 1,250 outlets in the USA, Canada and the United Kingdom.

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Payday lenders offer short-term loans to consumers to be repaid with their next paycheck. Many strapped borrowers, unable to repay, repeatedly roll the loans over, incurring fees of 300% to 1,000% on an annual basis. The industry has grown into a $40 billion annual business, with more payday outlets than McDonald's fast-food restaurants.

The industry says the fees reflect the risk of its product. But state and federal regulators, in response to consumer complaints, are starting to crack down. Congress set a 36% annual interest cap on payday loans to the military. Oregon recently passed a rate cap on loans in that state. Credit unions are offering lower-cost alternatives to payday loans, and federal regulators want commercial banks to develop small-loan products.

http://www.usatoday.com/money/industries/banking/2007-02-22-payday-loans-usat_x.htm

"Congress set a 36%annual interest cap on payday loans to the military." Thanks for supporting the troops guys.:eyes: First the payroll fucks theses guys over by not correctly issuing the proper amount (if at all), and stuck with no other resources, the folks head to the happy lending folks conveniently located right outside the base entrance.

As for everyone else-as more and more folks live close to the edge, these folks will become as big the credit card companies. Their rates should be fixed period. They take advantage of those that are the weakest. I can really understand Jesus' anger with the money changers at the temple.