Payday Lending News
The latest news on payday loans and the payday lending industry from the Center for Responsible Lending.
- Say No to Payday Loans: 5 Safer Sources of Quick Cash
Daily Finance 13 Oct 2013
Although payday loans may seem like the best choice for consumers with poor credit who need quick cash, these loans come with high interest rates and little transparency about fees, prompting 13 states to ban them or adopt strict usury laws. Compared to the annual percentage rate (APR) of 10 percent to 25 percent for a bank-issued personal loan, the APR on a payday loan can range from 300 percent to over 700 percent.
- Lakewood OH Extends Ban on Payday Lenders
Lakewood Patch (OH) 10 Oct 2013
Officials in Lakewood, Ohio, say that many payday lenders are exploiting “loopholes” in the 2008 Short-Term Lending Act, which otherwise caps the interest rates that these lenders can charge.
- J.P. Morgan to Cull Business Clients
Wall Street Journal 09 Oct 2013
JPMorgan Chase is seeking to rein in lending to pawn shops, payday lenders, check cashers, "buy here pay here" auto dealerships, and third-party payment processors as it moves to tighten controls in the face of greater regulatory scrutiny.
- California Banks, Credit Unions Warned to Be on Lookout for Illegal Payday Lenders
Sacramento Bee (CA) 09 Oct 2013
In its ongoing crackdown against illegal payday loans, California is warning banks and credit unions to watch for fraudulent lenders. "By accepting debit and credit transactions from unlicensed payday lenders ... financial institutions are, knowingly or unknowingly, enabling illegal payday loan transactions to occur in California," the state Department of Business Oversight (DBO) cautioned on Oct. 7 in letters to more than 300 state-licensed institutions.
- Despite 2010 Bill, Payday Loans Continue
Colorado Springs Business Journal 08 Oct 2013
Recent data from the Colorado attorney general’s office shows that the number of payday loans in the state increased slightly from 2011 to 2012. Under rules by the Colorado General Assembly, payday lenders cannot offer loans larger than $500 or charge interest rates greater than 45 percent. Although the borrowed amount for individual payday loans has increased, the number of businesses offering the product in Colorado has declined.
- Is the Death Knell Sounding for Payday Lenders?
ConsumerAffairs.com (CA) 07 Oct 2013
Consumer advocates and regulators have long complained about the payday loan industry, saying that the small loans -- which carry high fees and often must be repaid in full in about two weeks -- trap borrowers in a cycle of debt. The Center for Responsible Lending (CRL) has been lobbying to curb the business on a national level, and it believes a sea change is underway.
- Check-Cashing Ordinance
Signal Tribune (CA) 04 Oct 2013
City councilors serving Long Beach, Calif., voted last month to approve an ordinance that establishes new definitions and regulations for financial services providers that include check-cashing businesses, payday lenders, and auto title lenders. The measure prohibits new short-term lenders from locating within 1,320 feet of any other such business in neighborhood-commercial, pedestrian-oriented, planned-development, and industrial-zoning districts.
- Arkansas AG Sues Online Payday Lenders
Associated Press 02 Oct 2013
Arkansas Attorney General Dustin McDaniel is suing companies that he says worked together to offer illegal payday loans online.
- Lenders, Watchdog Groups Talk Impact of New Regulations
The Missouri Times 30 Sep 2013
The Missouri legislature overrode 10 bills vetoed earlier this year by Gov. Jay Nixon -- including House Bill 329, which alters some regulations for financial institutions. Nixon worried that the measure would allow payday lenders to up their fees, which House Democrats warned would squeeze the poorest Missourians.
- N.Y. Attorney General Settles With Some Payday Loan Companies
Reuters 30 Sep 2013
New York Attorney General Eric Schneiderman has agreed to a settlement with five payday loan companies accused of violating state usury and licensed lender laws by charging more than the maximum 16 percent interest rate allowed for most lenders not licensed by the state.
- States Sharpen Payday-Loan Scrutiny
Wall Street Journal 26 Sep 2013
State regulators are trying to rein in payday loans by pressuring lenders to submit customer information to state databases. Alabama became the most recent state to call for a database, following similar proposals in California, Pennsylvania, and other areas.
- CFPB Rejects Bid by Tribal Online Lenders to Block Probe
Bloomberg 26 Sep 2013
Three Native American online lenders, claiming that the Consumer Financial Protection Bureau has no authority over them, have lost their bid to terminate an investigation against them for possible abuses of consumers.
- Sunnyvale Enacts Restrictions on Payday Lenders
CBS San Francisco 26 Sep 2013
Sunnyvale, Calif., has enacted an ordinance that limits the number of payday lending installations allowed in the city. The new law allows for six payday establishments, although a grandfather clause permits the eight existing businesses to remain open.
- FDIC Accused of Waging Stealth Crackdown on Online Lenders
American Banker 23 Sep 2013
The Federal Deposit Insurance Corp. has been ramping up reviews of banks' third-party relationships just as some online lenders, which rely on banks to process their transactions, are facing serious questions about their exorbitant interest rates and their liability under state licensing laws.
- Kansas City Area Taking the Lead in the Online Lending Industry
Kansas City Star 21 Sep 2013
At least six agencies within the U.S. government have launched a crackdown on Internet short-term lending, which is good news for low-income consumers hurt by high interest rates and fees, according to an editorial in the Kansas City Star.