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Displaying results 1 - 3 of 3 items found.
1. Editorial: Predatory Payday Lending Must Be Banned
(Web Page; Thu Dec 10 17:17:00 CST 2009)
Description: The stance of the San Jose Mercury News is that payday lending is a "predatory" business that profits from trapping borrowers in "a cycle of debt" and should be banned. While paying 400 percent in annual interest seems absurd, the paper notes than an estimated 1 million California residents take out high-cost, short-term loans each year. The practice is legal in the state and 34 others, despite the fact that such high rates are prohibited when attached to other types of consumer loans. The Mercury News editors cite research illustrating the negative impact that the industry has in the state. One study finds that applicants who successfully obtained payday financing are two times more likely than those applications were rejected to file bankruptcy within two years due to excessive fees, while another shows that borrowers obtaining more than four loans per year account for 90 percent of payday lenders' business. The paper calls for Congress or state lawmakers to impose interest rate caps of 36 percent on payday loans, noting that the Center for Responsible Lending says these limits are the most effective weapon against predatory payday lending. Congress already has imposed a 36 percent ceiling on short-term loans made to military personnel, but the Mercury News editors argue that all borrowers have a right to such protections.
2. The Victims of Payday Lending
(Web Page; Thu Dec 10 12:06:00 CST 2009)
Description: Stories of borrowers who have been victims of payday lending, how they got caught in the trap, how much it cost them.
3. Payday Lending: A 400% Interest Debt Trap
(Web Page; Thu Dec 10 12:06:00 CST 2009)
Description: Payday lending traps borrowers in long-term 400% interest debt, making them vulnerable to overdue bills, overdraft fees, credit card delinquency and bankruptcy. A 36% cap on annual interest springs the debt trap.
