A recent report argues that payday loan borrowers in the UK are tech-savvy and financially literate, countering reports that paint borrowers as vulnerable. The “Credit Crunched” report, the result of a survey conducted by the UK’s Consumer Finance Association, which represents short-term loan lenders, analyzed the finance needs of three age groups: millenials, middle-aged adults and retiring baby boomers. The report found that technology played a large role in borrowers’ financial knowledge and expectations.
Payday Loans News
May, 21, 2013
May, 20, 2013
The North Carolina Attorney General is taking up arms to protect Marines and members of the military from predatory payday loan lenders. On May 15, Attorney General Roy Cooper hosted a “Scam Jam” at Marine Corps Camp Lejeune. During the presentation he raised awareness about identity theft, automobile scams and usurious predatory payday loans; all of which threaten the financial wellbeing of both enlisted Marines and their families.
May, 17, 2013
Rhode Island may be the next state to dramatically lower their payday loan interest rate cap, depending on how the General Assembly votes on a new proposal. The bill, which was presented to the state’s General Assembly on Wednesday, would lower the payday loan interest rate cap to 36 percent. Under the current law, lenders can charge an APR of 260 percent, or $10 for every $100 borrowed. Supporters of the bill include Treasurer Gina Raimondo and the Rhode Island Payday Lending Reform Coalition. Ben Coleman, a Rhode Island math teacher and representative of the coalition, said that he did not believe the bill would pass.
May, 13, 2013
A new report has stated that payday loans damage the nation’s economy. Worse still, they purportedly cost the economy nearly $1 billion in 2011. The report, titled The Net Economic Impact of Payday Lending in the U.S., argues that by borrowing instant loans, consumers are simply getting themselves into worse-off situations. By using data from state regulators, the report claimed that the payday loan industry caused a loss of economic activity and a net loss of 14,094 jobs.
May, 8, 2013
The British Advertising Standards Authority has banned a payday loan advertisement for suggesting that short-term, high interest loans can be used to fund a celebrity lifestyle. The ad, which promoted payday loans offered by PDB UK’s Cash Lady, features media personality and former girl group member Kerry Katona. Katona, who filed for bankruptcy in 2008, references her own financial difficulties throughout the commercial.
May, 7, 2013
Bay Area lawmakers are working to regulate payday lending in their counties following the failure of reform legislation in the state senate. Berkeley city Councilman Jesse Arreguin has drafted a plan to control the opening of new payday lending centers in his city. Legislators in several Bay Area cities, including Oakland, San Jose and San Francisco, have also worked to pass payday lending reform bills that are stricter than state laws.
Apr, 30, 2013
Payday lenders have found a new way to circumvent state usury laws. By partnering with Native American tribes and operating under their sovereign status, payday lenders are able to lend to anyone in any state at whatever interest rate they choose. The origins of tribal immunity date back to before the United States was founded. Tribes were sovereign nations at the time and subsequent legal acts between the settlers and the tribes continued to recognize that sovereignty. For this reason tribes cannot be sued unless Congress allows it or the tribe waives its immunity.
Apr, 26, 2013
The Consumer Financial Protection Bureau (CFPB) issued a report stating that payday loans and deposit advance loans lead customers into a cycle of debt. The report attributes loose lending standards, high costs and risky loan structures to the impact short-term loans have on consumers’ financial health. Loans offered by both banks and payday lenders are given as a way to “bridge a cash flow shortage between paychecks.” Findings
Apr, 24, 2013
Federal regulators are preparing to crack down on short-term, high-interest loans, according to recent reports from the New York Times and the Washington Post. Storefront and online payday loan lenders will not be targeted in their new regulation. Instead, regulators are going after payday lenders’ big bank counterparts. Big banks offer short-term loans with similarly high interest rates. Wells Fargo charges $1.50 for every $20 borrowed, which can amount to a 300 percent APR.
Apr, 18, 2013
California politicians voted down a bill that would have increased regulation on payday lending during a Wednesday meeting of the Senate’s banking committee. The bill, SB 515, would have prevented borrowers from taking out more than four payday loans in one year. It also called for stronger vetting of payday loan borrowers’ ability to pay and would have extended borrowers’ repayment periods. Five members of the California Senate Banking and Financial Institutions Committee voted against the bill, three voted for it and one member abstained.