Payday Lending News
The latest news on payday loans and the payday lending industry from the Center for Responsible Lending.
- Fresno Pushes Payday Loan Limits, Critics Stress Financial Dangers
ABC - KFSN Fresno (CA) 21 Nov 2013
There are 66 payday lenders already licensed to do business in Fresno, Calif., so officials there are taking steps to check the local growth of such companies -- which state regulators say charge annual interest rates of about 460 percent.
- Payday Lender Cash America Fined Over Claims of Robo-Signing, Gouging Military Members
Washington Pos 21 Nov 2013
The Consumer Financial Protection Bureau (CFPB) has reached a $19 million settlement with payday lender Cash America over abusive practices such as "robo-signing," in which employees stamped a lawyer’s signature on court documents used to sue borrowers for past-due debts. This tactic, according to the CFPB, helped the company improperly make money from at least 14,397 U.S. consumers. The settlement with Cash America is the CFPB's first with a short-term, small-dollar lender. The agency also found cases in which Cash America charged active-duty service members and their families more than the 36 percent interest rate limit set by the Military Lending Act.
- Senate Aging Committee Launches Anti-Fraud Hotline for Seniors
Reverse Mortgage Daily 20 Nov 2013
The U.S. Senate Special Committee on Aging recently went live a new anti-fraud hotline that older Americans can contact if they believe they have fallen prey to a financial scam. The toll-free number will put callers in touch with committee investigators who can hear their complaints about payday loans, identity theft, bogus sweepstakes and lottery schemes, abusive reverse mortgage deals, investment scams, Social Security and Medicare fraud, and other elder financial abuse problems.
- Jay Blasts 'Scumbags' Who Prey on Veterans
Charleston Gazette (West Virginia) 20 Nov 2013
Because they are at high risk of predatory or fraudulent lending and debt collection, enlisted persons should be wary of high-pressure sales, said witnesses at a U.S. Senate Commerce Committee hearing on Nov. 20. Sen. Jay Rockefeller (D-W.Va.) called the meeting to address why military members have higher credit card debt and why they are more likely to use high-interest loans such as payday lenders.
- Markey Introduces Bill to Protect Troops From Predatory Lenders
Hispanic Business 20 Nov 2013
Enlisted persons and their families are three times as likely as civilian households to turn to predatory payday loans when in financial distress and also are more likely to carry heavy credit card debt, but new legislation promises to give them alternative choices. The Military Savings Act, introduced Nov. 20 by Sen. Edward Markey (D-Mass.), creates a pilot program under which financial institutions on base offer innovative products to help members of the Armed Services and their families get on more stable financial ground.
- Tennessee Regulators to Back Off Some Payday Lenders
Nashville Business Journal 18 Nov 2013
Payday lenders in good standing with the Tennessee Department of Financial Institutions will enjoy a larger gap between inspections, according to WPLN Nashville Public Radio.
- Reining in Payday Lenders
New York Times 17 Nov 2013
Earlier this month, the Consumer Financial Protection Bureau (CFPB) announced that it will start to collect complaints from borrowers who may have experienced unreasonable fees, unauthorized withdrawals from their checking accounts, or other abuses from payday lenders.
- State Puts Brakes on Online Lender
Coeur d'Alene Press 13 Nov 2013
Financial regulators in Idaho have imposed a cease-and-desist order against AAA Payday Advance, an online lender that is based in Utah and has no license to do business in Idaho. Violation of the licensing requirements renders payday and other consumer loans void, uncollectable, and unenforceable, according to Idaho Department of Finance director Gavin Gee.
- Faith Groups Urge Stricter Rules on Payday Loans
Minneapolis Star Tribune 12 Nov 2013
The Joint Religious Legislative Coalition has released a report calling for a broad new crackdown on payday lending in Minnesota, arguing that current limits on the industry are inadequate.
- AARP Looks to Legislate Payday Loans
The Advocate (LA) 12 Nov 2013
The AARP is preparing to propose legislation that would limit the long-term interest rates for “payday” loans in Louisiana, after a survey found support for this effort among 60 percent of voting-age state residents.
- Louisiana Advocacy Group Seeks Limits on Payday Loan
The Advertiser (LA) 11 Nov 2013
Many consumers who take out a payday loan are put into even worse circumstances when forced to pay back more than they borrowed, according to David Gray, a policy analyst for the Louisiana Budget Project.
- Here’s How Veterans Are Being Targeted for Crippling Loans
Care2 11 Nov 2013
Although the nation's former enlisted personnel can receive a variety of benefits through the Veterans Administration (VA), many find themselves the targets of exploitative lending practices in the financial sector, such as bait-and-switch loan terms and 400 percent interest rates.
- Fight Against Illegal Payday Loans Turns to Banks
Minneapolis Star Tribune (MN) 09 Nov 2013
Regulators and lawmakers have long been attempting to limit payday loans, but the struggle is moving away from the companies that offer the loans and in the direction of the mainstream financial institutions that help process them. New Jersey borrower Angel L. Gordon, for example, has filed a potential class-action lawsuit against U.S. Bank for its role in processing allegedly illegal loans that she obtained last year from online lender National Opportunities Unlimited Inc. Gordon spent $1,814 over 10 weeks to repay an $800 advance.
- CFPB Now Taking Payday Loan Complaints
Cleveland Plain Dealer (OH) 06 Nov 2013
The Consumer Financial Protection Bureau (CFPB) on Nov. 6 confirmed that it now accepts payday loan gripes from consumers. The bureau is the first federal agency to have supervisory authority over the payday industry. It will field consumer complaints related to unexpected fees or interest, unauthorized or incorrect bank-account charges, receipt of loans for which the consumer did not apply, and failure to deliver loans.
- Reforming Minnesota Payday Lending
Twin Cities Daily Planet (MN) 04 Nov 2013
Some payday lending companies have taken advantage of a loophole in Minnesota’s law that allows exorbitant interest rates. Between 2007 and 2011, the number of payday loans in the state ballooned from 172,000 to 338,000. Data from the Minnesota Department of Commerce indicate that the typical payday borrower takes out an average of 10 loans a year. In 2012, the city of Minneapolis alone accounted for more than $8.6 million of payday loans, at annual percentage rates of 400 percent and higher.
- Corinth TX Mulls Rules on Lending
Denton Record-Chronicle (TX) 02 Nov 2013
Officials in Corinth, Texas, are contemplating a move to regulate credit-access, payday, and title lending companies within city limits, which would make it the eighth city to do so, according to a Texas Municipal League report. The paper notes that many states have enacted laws “to restrict predatory lending practices, but meaningful reforms have failed to pass the Texas Legislature in the last three sessions.”
- Payday Loans Drop as Lenders Exploit Loophole
Madison Capital Times (WI) 31 Oct 2013
Payday loans in Wisconsin have declined significantly since 2010, when former Gov. Jim Doyle signed into law legislation intended to limit predatory lending. In 2010, 460 lenders provided over 1.15 million loans worth $482 million; but by the next year, the number of lenders dropped to 423 and the number of total loans fell to 255,117 with an aggregate value of $76.6 million. Experts say, however, that the data only shows how easily payday loan operators exploit legal loopholes.
- Two Tribes Agree to End Payday Loan Practices
Tulsa World 29 Oct 2013
Payday lenders owned by two Oklahoma Indian tribes will cease the use of aggressive collection techniques, such as threatening borrowers with court action and arrest. The concessions are included under a partial settlement with the Federal Trade Commission (FTC), approved by a U.S. District Court judge in Nevada this month.
- New PayDay Loan Alternative Program to Be Unveiled
Woonsocket Call 28 Oct 2013
A coalition of non-profits and private companies has established the Woonsocket Payday Loan Alternative Program, an experiment in consumer lending that could help convince Rhode Island legislators to abolish high-cost payday loans. The program, a joint venture of the United Way and the Capital Good Fund, is scheduled to launch on Nov. 4 in Woonsocket, R.I.