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 ...
Agreed.
Everything should be free. It’s mean to expect people to work.
Hated that commercial.
Damn straight.
It’s only fair.
I cant stand people like those in the article.
They need a caretaker...
They probably do.
This will be a boon for loan sharks.
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