Consumerist Takes Your Financial Reform Questions To The White House
You had questions, we got answers. On Tuesday, we went to Washington and interviewed Diana Farrell, Deputy Director of the National Economic Council, about the Consumer Financial Protection Agency. Here's a piece of the video of our interview, where Farrell answers your questions about payday lending and protections for underserved consumers.
We'll have more excerpts from our interview, along with a full transcript, shortly.
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Comments:
Talk all talk but in the end no real protection for consumers will take place. Its all in the fine print allready. We need caps.
Oh. My. God. Has Ben experienced a traumatic hair loss? Why?
Great job guys!
@frodolives35: i don't know how i feel about this. i live in a state that has a usury cap (18%APR for banks; 12%APR for non-banks) & strict lending requirements. what has resulted is that people in need of these services seek them outside of my state. it's not as if the market disappears - it just goes "underground".
as a result, an unlevel playing field has been created. consumers still obtain these loans outside of the jurisdiction of state laws, making it virtually impossible for the state to protect their interests when they are defrauded.
i'm glad the usury cap exists here (& yes, banks still make money with the cap in place), but i fear that in some respects, it is more harmful to consumers than it is helpful. once people reach the point where they are unable to obtain financing, the laws actually work against them & can force them into a situation worse than before they were in need of that short-term loan.
@mac-phisto: but that doesn't make sense. your problem isn't with caps, it's with caps that only exist in your state. i'm sure frodo want's a federally set cap.
if an institution cannot extend a loan to someone for a good reason, i.e. their ability or likelihood of paying is too low, they shouldn't get the loan. They'll have to tough it out like everyone else. No one has an inherent right to be loaned money.
if someone who can't pay is given a loan, I would say they're worse off than they were before.
@Elcheecho: the point is that even with a federally-set cap equal to the caps in my state (which essentially make payday lending illegal), people in need of a loan will still seek out ways to obtain it. that means borrowing from unlicensed or illegal lenders & could result in worse circumstances than if a regulated option was available to them.
Would it be possible to get a transcript of this? Some of us can't watch videos at work :(
Anybody wanna borrow some dough, at 5000% - compounded hourly!
I look forward to reading the transcript.
My question! They used my question! Too bad she didn't address it.
transcript yet?
Wow. I'm happy to learn someone is finally taking actions to take down these modern day loan sharks. It disgusts me to see companies take advantage of the people who visit these places, mostly the working poor. Consumer education classes in underprivileged communities needs to be the next step taken to prevent people from continuing this cycle of taking out high interest loans that are only driving them deeper into debt.