payday loans

Military Lending Act rules release fitting act for anniversary of consumer law and agency

Written by Dory Rand on July 21, 2015 - 5:26pm

While it was obvious to Holly Petraeus, Assistant Director for the Office of Servicemember Affairs, and others who visit areas near military bases that high-cost, predatory lenders were preying on vulnerable service members and their families.

A birthday wish for the CFPB: Strong payday loan protections

Payday loans often trap consumers in a cycle of debt due to lump sum payments, high annual percentage rates (APR), and little consideration of whether borrowers can afford to repay their loans. To combat this, the CFPB is developing new rules for payday loans. In an initial outline of the proposed rules, the CFPB proposed to require that lenders verify a borrower’s ability to pay back a loan while still covering basic necessities and existing debts, among other protections.

New rules proposed for payday loans (CreditCard.com)

he U.S. Consumer Financial Protection Bureau held a public hearing Thursday as a backdrop for its proposals, which include limits on loan rollovers, freezes on new loans and limits on how lenders tap borrowers' bank accounts. The proposals apply to auto title loans, deposit advances and high-rate installment loans as well as payday loans

CFPB Proposal is Major Step Forward towards Ending Payday Loan Cycle of Debt

Woodstock Institute is part of the Monsignor John Egan Campaign for Payday Loan reform and the Stop the Debt Trap Campaign, which are fighting for an end to abusive lending.  In Illinois, short-term payday loans carry a 391 percent annual percentage rate (APR), installment loans carry a 99 percent APR, and car title loans are largely unregulated. Dory Rand, President of Woodstock Institute, made the following statement on the proposal:

 

Comment letter to the Department of Defense supporting regulations that close loopholes in the Military Lending Act

The Military Lending Act (MLA) sets a 36 percent rate cap on consumer credit for service members and authorizes the Department of Defense to define “consumer credit.” The existing definition is narrow and allows high-cost lenders to continue to target service members. This letter supports new proposed rules that expand the definition of “consumer credit” to include all forms of credit subject to the Truth in Lending Act and not excluded by the MLA. The letter also urges the Department to include overdraft programs and rent-to-own transactions in its definition of consumer credit.

It's high time for effective payday loan rules (Crain's Chicago Business)

If done right, the national regulations could ensure that consumers will be protected from payday lenders' worst practices, regardless of where they take out a loan.

But if regulators miss the opportunity to create comprehensive rules, lenders could continue exploiting loopholes and trapping borrowers in a long-term cycle of debt. The Consumer Financial Protection Bureau needs to ensure that this doesn't happen.

Banks bid farewell to payday loans (Daytona Times)

More good news keeps coming for consumers in early 2014. On the heels of new mortgage rules that took effect January 10, the following week four banks making payday loans pulled their products from the market. Announcing a halt to their triple-digit interest rates were Wells Fargo, Regions, Fifth Third and US Bank.

Together, these lenders have combined assets of $2.1 trillion, serving customers through 30,000 branches and more than 21,500 ATMs across the country.

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