Policy & Legislation
Battles rage across the country between the payday lending industry and coalitions of citizens groups who are increasingly insisting they will not accept 400 percent interest lending. Fifteen states plus the District of Columbia have outlawed triple-digit interest, and two states rejected them in ballot measures last November – Ohio and Arizona, which becomes the sixteenth state to put a stop to the predation through an interest rate cap as of July 2010.
Other than protecting military families with a 36% APR cap on small predatory loans, Congress has not yet moved to expand reforms across the country, and some big national banks are beginning to get into the business with loans that are virtually indistinguishable from storefront payday loans.
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- High-Cost Payday Lending Traps Mississippi Borrowers
July 26, 2010The state of Mississippi is gearing up for a legislative battle as the expiration of a law approaches in 2012. If the law sunsets as scheduled, payday lenders will no longer be exempt from a 36 percent cap on annual interest rates. Payday loans carry rates of up to 572 percent and cost families $270 million in fees every year.
- Payday lenders pose as brokers to evade interest rate caps
July 16, 2010In recent years, a growing number of states have enacted interest rate caps and other protections to eliminate abusive payday lending practices that trap consumers in long term debt. Payday lenders repeatedly evade these rules, finding new ways to maintain business as usual and continue to offer short-term loans with triple-digit interest rates. The latest form of subterfuge is one in which the payday lenders position themselves as brokers, seeking licensure under state-level laws designed to regulate credit repair organizations. Under this scheme, payday lenders charge the maximum interest rate allowed on the underlying loan plus an additional "broker" fee, typically ranging from $20 to $25 per $100, resulting in loans with an effective annual percent interest (APR) in excess of 500%.
- Comments on NCUA's Notice of Proposed Rulemaking on Short-term, Small Amount Loans
July 6, 2010Comments of the Center for Responsible Lending on the Notice of Proposed Rulemaking on Short-term, Small Amount Loans from National Credit Union Administration--12 CFR Part 701--RIN 3133-AD71. Submitted July 6, 2010.
- Guidance to OTS on Overdraft Protection Programs
June 28, 2010CRL’s, Consumer Federation of America and the National Consumer Law Center’s comment letter to the OTS regarding the agency’s Supplemental Guidance on Overdraft Protection Programs.
- CRL Comment Letter on Garnishment of Federal Benefits
June 18, 2010CRL and other consumer groups provide comment on the Office of Personnel Management's proposed rule regarding garnishment of federal benefits.
