Consumerist
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payday loans
House Preparing To Legalize Payday Loans With 391% APRs
A House subcommittee wants to legalize payday loans with interest rates of up to 391%. Lobbyists from the payday industry bought Congress' support by showering influential members, including Chairman Luiz Gutierrez, with campaign cash. The Congressman is now playing good cop, bad cop with the payday industry, which is pretending to oppose his generous gift of a bill. More » -
predatory lending
National Usury Limit Could Reduce Number Of People Paying Debt Until They Die
For about 30 years, there has been effectively no limit on the interest rates lenders can charge. This means some loans—especially payday loans, tax refund anticipation loans, overdraft protection loans, and car title loans—can have effective interest rates as high as 3,500%.
A new bill proposed by Senator Richard Durbin (D-Ill.) would cap the interest rate on consumer credit transactions at 36%. Is it time for the government to reign in the lending market? Yes, it is. More »
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scams
Fake Debt Collectors Are Trying To Intimidate You Out Of Your Money
ABCNews says that the West Virginia Attorney General is warning people about fake debt collectors who will call you repeatedly at home and at work, threatening you with arrest for not paying a debt... that doesn't even exist. More » -
payday loans
Ohio Payday Lenders Lie, Bribe The Homeless In Attempt To Overturn Usury Limits
Ohio payday lenders, still smarting from their punch in the face, are turning to lies and deceit to qualify a ballot initiative that would overturn the state's recently approved usury limits. The industry's petition gatherers are telling people that the initiative would "lower interest rates," even though it would raise the maximum allowable APR from 28% to an astounding 391%. They're also giving dollars to illiterate homeless people who sign the petition. More » -
payday loans
Ohio Senate Passes Strict Lending Legislation, Prepares To Punch Payday Lenders In The Face
The ass-kicking, face-punching anti-payday lending legislation that we've been keeping an eye on in Ohio has passed the Senate. The Columbus Dispatch says: More » -
Research shows that, despite charging high interest rates, payday lenders don't make much money than typical businesses. [Credit Slips]
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how to
Break The PayDay Loan Death Cycle
Are you trapped in a payday loan death cycle, or have a friend or family member who is? See, the problem with a payday loan is that some people aren't able to pay the first one off (if you don't have money in the first place, you're not going to be any better off two weeks later!), and then have to take out more and more loans to cover each loan they couldn't pay off. Not only is there high interest, there's fees. A former PayDay loan lender on personalbudgettraining.com shares his advice for breaking out of the debt trap.
If you can't get out of this right now, start by advancing $50 less per pay period. Take the difference of what you were paying us in fees and start paying it into an emergency fund. Grab a job delivering pizzas, babysitting, whatever, and pay it into an emergency fund. Borrow less and less from us. Use the EF for actual emergencies. Once you are out of this, don't get back into it.
Earn more, borrow less, and pay off more.(Photo: ninjapoodles)
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usury
New Hampshire Gives Payday Lenders The Boot
New Hampshire will become the latest state to keep payday lenders from gouging their patrons. A measure passed by the legislature will cap interest rates on payday loans at 36%, a drastic change for an industry used to bludgeoning underbanked consumers with interest rates exceeding 500%. Payday borrowers spend an average of $793 trying to repay a $325 loan. Let's see how the economic leeches spin this as a loss for consumers. More » -
"If it sounds like legal loan-sharking, it's not. 'Loan sharks are actually cheaper," leader of the Ohio Coalition for Responsible Lending, talking about payday loans. [CNN Money]
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Soldier robs two banks because he was $30,000 in debt to payday loan agencies. [Seattle Post-Intelligencer]
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funny
Join The Predatory Lending Association!
PredatoryLendingAssociation.com is a clever parody site mocking payday loans and the efforts of groups like the The Community Financial Services Association of America (CFSA), a lobbying group that tries to make the loan sharks look like respectable financial institutions. More » -
payday loans
Usury Is Good For You
Usury is good for you. That's the lesson from an article in today's WSJ using empirical evidence to defend the practice of charging 200% interest rates.
A randomly selected pool of Latin America borrowers who were just below the normal level of credit worthiness were approved for a 200% 4-month installment loan. A control group was denied based on normal policies. Tracked over the next two years, the group with the high-interest loan made more money, went less hungry, had better credit scores, and were happier than their control group. They also had higher default rates. More »
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usury
Payday Loans Die In DC
In a victory for consumers, Washington D.C. effectively outlawed payday lending today with the passage of the Payday Loan Consumer Protection Act capping lending interest rates at 24%. More » -
"My company was deliberately targeting minority people for a continuous loan process that they would never, ever get out of. " - Bill Harrod, Former Payday Loan Manager. [NBC4]
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debt
Non-Profit Payday Loans: Loansharks With Shorter Teeth?
"I have almost $100 in savings," said Ms. Truckey, who earns $9.50 an hour as a supermarket meat clerk. "I'm in a comfortable position for the first time in many years."
That's a lady who is finally digging herself out of a payday loan hole with the help of a "non-profit" payday loan. At one point, Truckey was paying $600 a month in finance charges alone. Now she has a new loan through GoodMoney, operated by local credit union. The new loan's APR is only 252%, about half what she was paying before.
That's still a pretty crappy number, and it begs the question, does it really cost that much to lend money? 12 states disagree and have usury laws that prohibit payday lending. There's also an important book would-be payday debtors should read, called, "Don't Buy Stuff You Can't Afford."
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Payday lenders in Oregon are closing shop in the wake of new regulations that cap the maximum interest of any consumer loan at 36%.
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payday lending
FDIC Launches Program Encouraging Banks To Offer Small Dollar Loans
The FDIC has announced a program designed to study and encourage small dollar lending programs designed to compete with payday lenders. Under the program banks would offer "loan amounts of up to $1,000, mandatory savings components, payment periods that extend beyond a single pay cycle, interest rates below 36 percent, low or no origination fees, no prepayment penalties, prompt loan application processing, and access to financial education to help with asset building." More »
payday loans
New York, 4:44 PM
Sun Jul 5
6 posts in the last 24 hours
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