Senator Presses Consumer Bureau on Installment Lender World Finance

July 25, 2013
payday lending news

The Senate Special Committee on Aging held a July 24 hearing that examined how high-cost financial products such as payday loans affect seniors. Sen. Ron Wyden (D-Ore.) questioned a top official from the Consumer Financial Protection Bureau (CFPB) on how to address and prevent abuses by installment lenders. Such lenders often trap borrowers in a cycle of debt and charge rates that can exceed 200 percent annually. An investigation by ProPublica and Marketplace found that lenders such as World Finance often add insurance products to loans that can double their cost or make a profit by persuading borrowers to use the product like a credit card, renewing loans time and time again for additional fees and interest. World Finance alone has more than 800,000 customers. David Silberman -- CFPB associate director for research, markets, and regulations -- said the agency has authority to crack down on non-bank lenders for breaking broad consumer protection laws but that it does not yet conduct regular examinations of installment lenders.
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