Posted on 10/07/2017 11:33:46 AM PDT by EveningStar
The Consumer Financial Protection Bureau’s new rules for payday loans and car title loans have drawn the predictable cries of outrage from lenders, particularly small storefront operators who say the restrictions will put them out of business. And it’s an understandable complaint — after spending five years researching the market for high-cost credit, the bureau has fired a shot right at the heart of these lenders’ business model.
But the outrage here isn’t what the regulators are doing. It’s the way these lenders have profited from the financial troubles of their customers. As the bureau’s research shows, payday lenders rely on consumers who can’t afford the loans they take out. With no way to repay their original loans other than to obtain further ones, most of these customers wind up paying more in fees than they originally borrowed.
That’s the definition of predatory lending, and the bureau’s rules precisely target just this problem. They don’t prohibit lenders from offering the sort of financial lifeline they claim to provide — one-time help for cash-strapped, credit-challenged people facing unexpected expenses, such as a large bill for medical care or car repairs. Instead, they stop lenders from racking up fees by making multiple loans in quick succession to people who couldn’t really afford them in the first place.
(Excerpt) Read more at latimes.com ...
While it is true that no one forces them to use payday loans, their situation somewhat forces them to engage in an endeavor that is basically hopeless for most. The vast majority of people using payday loans will never be able to get out from under the burden. It’s just a matter of math. The only people who gain from it are those who willingly participate in placing them under a unpayable amount of debt.
Their situation might be hopeless both before and after the transactions, but it leaves the loan sharks smiling. And it is probably less hopeless if they don’t start on the path toward an endless debt spiral. Their last state is worse than the first.
We have limits on how much interest can be charged on debt. We do that for a reason. There is sort of a loophole with regard to these loans. I think that closing that loophole is a good thing.
This might seem like tough love, but I think that it is the compassionate thing to do. I do think that this really is, in a small way, a case of making America great again.
I wish banks can make small loan amount with a 30 days payback, instead of every 2 weeks, or select an option of due date as long it is within 30 days.
I am currently using an online payday loan because I am unemployed. It has helped me & I have no trouble paying it back. When due date comes around I can extend it for another 30 days only once. Not allowed to take out another loan until the current loan is paid off. Just paid off my loan so I have to wait until 4 days to take out another loan. I may be eligible for an installment loan for $100,
I was thinking it may be my last loan because I don’t want it to turn into a habit, but I have car registration & a smog check so I may have to.
What was the fee? I got another bowel ful to do.
What’s she going to do when she loses her job?
Reminds me about the debate leading up the Housing Crisis of 2008. Everyone with a brain knew that lending had gotten totally out of control, even several years prior, with insane loans to people (sometimes as much as 10 times their income), but there was an element, sadly led by conservatives, that simply ignored everything and let the chips fall.
Well, they fell and now we have an extra $4 TRILLION or so of national debt due to the bailouts. The sad fact is that a certain percentage of people (large percentage) are simply NOT RESPONSIBLE when lenders dangle money in front of them, and they reach for it without considering the consequences.
So, sorry conservatives here, but I’m with the LA Times and I want these operations SHUT DOWN. They provide no useful function other than identifying where the trashy parts of cities are.
Nanny state. Big banks don’t want the competition with all their fees. For average working poor these places are cheaper than banks. If you owe money to a merchant - no problem getting a new account at different bank. If you owe money/fees to a bank then no bank will take a new account from you. Checks out clear in 2 days or less but deposits take 10-14 and they tweet it maximize bad check fees, overdraft fees, min balance fees, ....
Mob and payday/check cashing places have to compete for business but big banks us congressional and regulatory lobiests to fix the game.
Just look at numbers (lottery) payouts to see the biggest crooks. Pick 3 - state pays 400 but the mob pays 850 on 999:1 odds. Banks are the same IMHO.
have not done the phone deposit yet.
The result?
The worst recession since the 1930s.
My purse is more than $100! Noticed a number in it so looked it up online but don’t see what’s so great about it. Bought it at the church bazaar for $2 as I did the one before and the one before and the one before. Have always been of the opinion a purse should never cost more than it would ever have in it.
Yes, they do help when there often is no other answer.
“Have always been of the opinion a purse should never cost more than it would ever have in it.”
LOL! Oh, I agree. I own some expensive ‘bling’ too. $100 sunglasses I bought at St. Vinnie’s (thrift shop) for 99-CENTS, plus the case! I have a Stone Mountain Bag (not cheap!) I got for $5 and a Dooney and Brook (sp?) purse just like the ones I see CHAINED to their display rack in Macy’s, also purchased for pennies on the dollar.
I buy good shoes (Army feet) and always NEW undies, bras and socks. Anything else goes. :)
I had a 5 gal water bottle 3/4 or 2/3 full os assorted coins. I told a frinds daughters that they could keep what they rolled. I figured there was maybe 100 or 150 bucks in there that theyd share. Wrong. They made well over 500.00! Dang!
This is federal law, not state law.
Your bank may not even require you to have the coins rolled. My small local bank has a coin counting machine and doesn’t charge extra to count customers coins. I always figured those 10% machines were mostly for panhandlers without a bank account.
(R.I.P. Chuck Low, a.k.a. Morrie Kessler)
>>>What’s she going to do when she loses her job?
She’s retired. The regular check is Social Security.
She borrows ahead sometimes, better than begging from her friends, or worse.
these payday loans charge sometimes 300 percent interest. every paycheck they take out thier cut before you get yours. the balance never goes down every month. the only way is to make a lump sum payment and pay it off 100 percent.
Since Obama took over the school loan industry and now the taxpayers are on the hook, I would at least like the loans to be confined to certificates or degrees in fields that actually help people become employable. And I don’t mean working as a community organizer or social justice warrior, but a job that actually pays money so the loans can be repaid. And undo the rule Obama made that the loans will be forgiven if a person works for a non-profit for ten years.
When are we going to crack down on predatory taxation?
Go to a supermarket or store that has self-checkout machines, bring a pocket full of change, then stand there shoveling coins into the machine. Just don’t do it if there’s a line of people waiting.
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