Payday Lending News
The latest news on payday loans and the payday lending industry from the Center for Responsible Lending.
- Payday Loans by Credit Unions Come Under Fire
American Banker 20 May 2013
Nine federal credit unions are making loans bearing what amounts to triple-digit annual percentage rates, similar to payday loans attacked by regulators. Of the nine, three are directly offering the loans -- Kinecta Federal Credit Union in California, Tri-Rivers Federal Credit Union in Alabama, and Louisiana Federal Credit Union -- while six others use third-party service providers not subject to National Credit Union Administration supervision...
- Another Payday Loan Debate on the Horizon
Allentown Morning Call (PA) 18 May 2013
Pennsylvania state Sen. Pat Browne (R-Allentown) is preparing to introduce new legislation that he claims will stamp out payday lending by gradually transitioning consumers into mainstream credit. Consumer advocacy organizations, however, are gearing up to fight a plan that they say will continue to sanction high-cost loans and extended periods of debt...
- Report: Some Credit Unions Are Still Involved in Payday Lending
Consumerist 16 May 2013
Federal credit unions are subject to interest rate limits that make their products much more affordable than payday loans; however, a few have found underhanded ways to continue offering the high-cost products. In the past, some would skirt the usury cap by including additional fees not technically part of the annual percentage rate or by referring customers to payday lenders that use the credit union's name and brand to originate loans outside of the oversight of the National Credit Union Administration (NCUA)...
- On Victory Drive, Soldiers Defeated by Debt
ProPublica 15 May 2013
The U.S. Defense Department has launched a review of the Military Lending Act, a law that has largely failed in its mission to protect enlisted borrowers from predatory interest rates. According to a 2012 report from the Consumer Federation of America, the number of payday lenders in and around Fort Hood, Texas, has not declined since the 2006 law took effect...
- Behind the Photo: The Unexpected Job Duties of a Commanding Officer
Marketplace 14 May 2013
As an Army commander, Captain Brandon Archuleta's duties include not only leading his troops in war but also helping them to combat their financial ills. Despite the Military Lending Act, which cracks down on predatory practices against service members, young and financially naive enlisted persons often turn to alternative lending sources to try to get back on track...
- Raimondo: Cap Payday Loan Rates
Turnto10.com 13 May 2013
Rhode Island Treasurer Gina Raimondo on May 15 argued the case for reining in payday loan interest, which currently balloons to APRs as high as 260 percent in the state...
- Local Governments Urged to Avoid Unfair Prepaid Card Practices
Kansas City infoZine 09 May 2013
Consumers Union is asking city governments not to offer prepaid cards with high fees and few protections. The request comes after Oakland, Calif., launched a dual municipal identification card/prepaid debit card that carries several costly fees...
- Bills Limiting Payday Loans Dead in Legislature
WSFA-12 (AL) 06 May 2013
Some lawmakers in the Alabama Legislature sought to implement new restrictions on payday and auto title loans, but those efforts have failed for the 2013 session...
- Payday Loans Cost Economy $1 Billion in 2011: Study
CNBC.com 02 May 2013
A new report calculates that payday loans took almost $1 billion and thousands of jobs away from the U.S. economy in 2011. Broken down, the Insight Center for Community Economic Development finds that American consumers struggling to repay the advances withheld $774 million in spending; lost 14,000 jobs; and entered into 56,230 bankruptcies that siphoned another $169 million from the national economy...
- Cedar Rapids Wrestles With Limits on Payday Lenders
KCRG (Cedar Rapids, IA) 30 Apr 2013
In Cedar Rapids, Iowa, city officials are considering a new ordinance that would limit the locations of payday lending businesses. The city council’s Development Committee advanced the proposal to the full council for a May hearing...
- Tribes' Payday Loans Under Scrutiny
Los Angeles Times 29 Apr 2013
More Indian tribes are entering the payday loan business as a way to raise revenue for their reservations, but federal officials suspect that some tribes are paid to offer sovereign immunity that helps non-Indian payday lenders avoid state regulations. Tribes have largely avoided states' attempts to assert their authority over tribal lending operations, but the federal Consumer Financial Protection Bureau (CFPB) may institute a new crackdown...
- High-Cost Payday Loans Seeing Tremendous Growth
The Day (CT) 26 Apr 2013
High-cost financing, including payday loans and pawn shops, has grown in the last two decades to the point that nearly one in four Americans have used them, reports the National Bureau of Economic Research. This type of borrowing, often is plugged as a means of filling a shortfall between paychecks, typically carries steep fees.
- New Regs Could Wipe Out Bank Payday Loans
American Banker 26 Apr 2013
A slew of new rules coming down the pike could take the air out of bank payday offerings, known as deposit-advance loans. Proposals from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. are the agencies' "way of killing the product," according to bank industry attorney Jeremy Rosenblum of Ballard Spahr.
- U.S. Consumer Bureau Calls Payday Loans a Trap, Warns of New Rules
Reuters 24 Apr 2013
The U.S. Consumer Financial Protection Bureau (CFPB) has accused payday lenders of trapping borrowers in a cycle of debt and said that it may create new rules for short-term lending. Lenders often make small-dollar loans without actually checking whether the borrower will be able to repay them, according to the CFPB's April 24 report...
- Ohio Supreme Court Agrees to Hear Payday Loan Appeal
Cleveland Plain Dealer (OH) (04/24/13) Harris, Sheryl 24 Apr 2013
Ohio's Supreme Court will hear a payday lending case that could close the licensing loophole used by businesses to charge exorbitant interest. In November, an appellate court ruled that Ohio Neighborhood Finance wrongly used a mortgage lending license to circumvent the 28 percent annual interest rate ceiling set by the state's 2008 Short Term Lending Act.
- Payday Lending Bill Pulled From Floor After Raucous Debate
Texas Tribune 18 Apr 2013
After a heated debate over Senate Bill 1247, which sought to create a regulatory framework for payday and auto title lenders in Texas, Sen. John Carona (R-Dallas) finally agreed to pull the proposal from the Senate floor. Several bills before the state Legislature aim to impose limitations on short-term loans, but Carona's had been perceived as the most viable...
- The Wild West of Payday Loans for Joe College
MainStreet 16 Apr 2013
Student debt tripled between 2004 and 2012, according to a Feb. 28 report from the Federal Deposit Insurance Corp. Some 43 percent of all 25-year-olds had student loans in 2012. Some payday loans are also being marketed as student loans, creating another danger for financially vulnerable students and twenty-somethings...
- State Cites Online Payday Lender
Sacramento Business Journal 16 Apr 2013
Claiming that it is not licensed to do business in the state, the California Department of Corporations has leveled $32,500 in fines against the payday lender Pixycash.com. The lender, operated by Northway Financial Corp. Ltd. and Northway Broker Ltd. of Malta, is accused of soliciting its loan offers to California consumers via the Web...
- City Council Bans Payday Lenders in Lakewood (OH)
Patch.com 16 Apr 2013
Until Ohio's high court hands down a ruling on payday lending operations, the city of Lakewood is taking its own measures to clamp down on the high-cost loans. City councilors there passed a six-month moratorium on new cash-advance businesses...
- Taking Some Risk Out of Payday Loans
Los Angeles Times 15 Apr 2013
A group of consumer advocates is pushing a much-needed payday lending bill in California, writes the Los Angeles Times editorial board...