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Consumer Protection Agency Seeks Limits on Payday Lenders

Pay day loans

  • Regulate - Yes

    Votes: 36 81.8%

  • Regulate - No

    Votes: 7 15.9%

  • No opinion

    Votes: 1 2.3%
  • Total voters
    44
Cephus said:
Anyone who had decent credit wouldn't be at these places in the first place, they'd go to an actual bank or credit union and get a loan.
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Yup. That's the thing. Anyone who can get a loan from a reputable lender wouldn't go to a payday lender. The people who are there are there because they screwed up and trashed their own credit. There's a price to pay for not paying your lender back as agreed and on time.
 
Cephus said:
Loan sharks are not regulated, nor do they operate within the law, that's why they're illegal. Payday loans are regulated and they do operate within the law. It's too bad some people are so blinded by their agenda to tell the difference.
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I see it all the time, and I'm seeing it in this thread.

It's always someone else's fault. "I'm a victim of the predator."

WTF ever happened to personal responsibility? Pay your bills on time and as agreed, and you can get cheap credit at your local bank or credit union. Don't do that...you pay the price. And Uncle Sam is still looking out of you if you have to go to Payday Lender Central.
 
tres borrachos said:
I see it all the time, and I'm seeing it in this thread.

It's always someone else's fault. "I'm a victim of the predator."

WTF ever happened to personal responsibility? Pay your bills on time and as agreed, and you can get cheap credit at your local bank or credit union. Don't do that...you pay the price. And Uncle Sam is still looking out of you if you have to go to Payday Lender Central.
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I am glad that predatory loans with high interest are getting hit the same place they have been taking advantage of consumers...They will probably make up the difference with higher fees and lower interest...
 
Moonglow said:
I am glad that predatory loans with high interest are getting hit the same place they have been taking advantage of consumers...They will probably make up the difference with higher fees and lower interest...
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Or those consumers can start paying their debts on time and as agreed in the contracts they signed, and then they can get low interest loans at banks and credit unions like the other consumers who pay their bills do.
 
Cephus said:
Anyone who had decent credit wouldn't be at these places in the first place, they'd go to an actual bank or credit union and get a loan.
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I dont know....for $500 for an emergency? Will a bank do that in about an hour? Are there penalties there as well if you pay the money back within, say 1 week or 2?

And did Tres B say that the payday loans arent reported to the credit bureaus? So that could be a positive thing.....there are many cases where certain inquries into your credit...like your bank...actually affect your credit rating.
 
Cephus said:
Hardly. There isn't a national database of payday loans, at least not that I know of. Sure, the agreement asks if you have any loans outstanding elsewhere. All you have to do is say no. There's no way of telling if you have 100 of them out or not.
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Like I said, my wife worked for one, and yes they can tell if you have another one out already.
 
tres borrachos said:
Yup. That's the thing. Anyone who can get a loan from a reputable lender wouldn't go to a payday lender. The people who are there are there because they screwed up and trashed their own credit. There's a price to pay for not paying your lender back as agreed and on time.
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I wouldn't say the lenders aren't reputable, it's the people that aren't reputable, that's why they have to pay so much, just like people with terrible credit scores have to pay a lot to get a credit card. If they were responsible, they could get lower rates.
 
j-mac said:
No. You can only have 1 at a time
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Greetings, j-mac. :2wave:

How do the Payday Lenders get their money back if a person can't repay the loan? Can they garnish wages, or would you have to leave some kind of collateral with them at the time you get the loan? Do they turn people down? I ask because if the borrower is unable to get a loan anywhere else, there must be a reason for that. Do they cut a check on the spot - perhaps because of an immediate problem like getting car repairs done, and banks take a few days, or something else, like just running out of money before the next job paycheck arrives? Interesting subject...
 
Lursa said:
I dont know....for $500 for an emergency? Will a bank do that in about an hour? Are there penalties there as well if you pay the money back within, say 1 week or 2?

And did Tres B say that the payday loans arent reported to the credit bureaus? So that could be a positive thing.....there are many cases where certain inquries into your credit...like your bank...actually affect your credit rating.
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Most of these people don't want $500 for an emergency, they want money to put food on the table and gas in the tank. This is an ongoing problem, they are living beyond their means and not paying the rest of their bills either.
 
Cephus said:
I wouldn't say the lenders aren't reputable, it's the people that aren't reputable, that's why they have to pay so much, just like people with terrible credit scores have to pay a lot to get a credit card. If they were responsible, they could get lower rates.
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Yeah my use of the word "reputable" wasn't right.

All lending is based on risk. The higher the risk, the higher the rate. That's been the case for centuries. Risk based pricing is very common.
 
tres borrachos said:
How? They don't report to the credit bureaus.
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I have no idea. Granted, my last experience with this was 15 years ago when I helped the friend of a friend set up a payday advance franchise and went through all of the training and legal stuff, but at that time at least, there was no way to know, nobody reported to credit bureaus and competitors would hardly talk to each other. Maybe they've got friends in other companies or other stores, but with online payday places too, there's no way to be sure so far as I know.
 
polgara said:
Greetings, j-mac. :2wave:

How do the Payday Lenders get their money back if a person can't repay the loan? Can they garnish wages, or would you have to leave some kind of collateral with them at the time you get the loan? Do they turn people down? I ask because if the borrower is unable to get a loan anywhere else, there must be a reason for that. Do they cut a check on the spot - perhaps because of an immediate problem like getting car repairs done, and banks take a few days, or something else, like just running out of money before the next job paycheck arrives? Interesting subject...
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Payday lenders deposit money into your account in hours. That's why most of them require that you have a bank account.

Most of them don't require collateral - just that you be 18, have some income ($800 a month is the usual minimum requirement), and a bank account. They can collect the money the same way any lender can.
 
polgara said:
Greetings, j-mac. :2wave:

How do the Payday Lenders get their money back if a person can't repay the loan? Can they garnish wages, or would you have to leave some kind of collateral with them at the time you get the loan? Do they turn people down? I ask because if the borrower is unable to get a loan anywhere else, there must be a reason for that. Do they cut a check on the spot - perhaps because of an immediate problem like getting car repairs done, and banks take a few days, or something else, like just running out of money before the next job paycheck arrives? Interesting subject...
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Yes, they can garnish wages, they can sue them, they can use agencies that chase people around and get money back, but it's difficult and a great number of those loans just get written off. And absolutely they turn lots of people down, you have to have a demonstrable source of income, you have to be able to prove where you live and you have to have a number of references who will vouch for you. This typically takes an hour or so on the phone, but not everyone qualifies.
 
Cephus said:
I have no idea. Granted, my last experience with this was 15 years ago when I helped the friend of a friend set up a payday advance franchise and went through all of the training and legal stuff, but at that time at least, there was no way to know, nobody reported to credit bureaus and competitors would hardly talk to each other. Maybe they've got friends in other companies or other stores, but with online payday places too, there's no way to be sure so far as I know.
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They still don't report to the credit bureaus. Just like if you went to a bank and got a bridge loan (30 days or less), it won't be reported to any of the bureaus either.
 
tres borrachos said:
Payday lenders deposit money into your account in hours. That's why most of them require that you have a bank account.

Most of them don't require collateral - just that you be 18, have some income ($800 a month is the usual minimum requirement), and a bank account. They can collect the money the same way any lender can.
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Online ones do. The neighborhood payday lender just hands you cash and expects you to hand it back, plus interest, in 2 weeks.
 
Cephus said:
Online ones do. The neighborhood payday lender just hands you cash and expects you to hand it back, plus interest, in 2 weeks.
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Most online lenders don't require collateral, which is why they can turn it around so fast.

i remember one that used to advertise on TV - it was run by Native Americans. Western Sky or something. They got booted off the air and banned in a bunch of states.
 
tres borrachos said:
Payday lenders deposit money into your account in hours. That's why most of them require that you have a bank account.

Most of them don't require collateral - just that you be 18, have some income ($800 a month is the usual minimum requirement), and a bank account. They can collect the money the same way any lender can.
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Thanks for the info, tres. I wondered if they could request to hold your car title or something until they get their money back.
 
tres borrachos said:
Or those consumers can start paying their debts on time and as agreed in the contracts they signed, and then they can get low interest loans at banks and credit unions like the other consumers who pay their bills do.
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The banks own the Pay Day loans and should not be charging so much,,,meanwhile to get a 10k loan from a bank, the interest is not always that low and the fees are around $2,500.00
 
polgara said:
Thanks for the info, tres. I wondered if they could request to hold your car title or something until they get their money back.
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Hey Pol, yeah the ones who take car loans for advances will hold your car and dispose of it on your behalf if you don't pay. The ones who just give you $1500 or so, they have an agreement (and it's legal) so they can do whatever they have to do to get you to make good on the loan, just like a bank will.
 
tres borrachos said:
Most online lenders don't require collateral, which is why they can turn it around so fast.

i remember one that used to advertise on TV - it was run by Native Americans. Western Sky or something. They got booted off the air and banned in a bunch of states.
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Offline lenders don't require collateral either. It's just a matter of doing due diligence to verify information on the application. Anyone can turn around that fast. I seem to remember seeing that Western Sky thing in the past, don't really pay attention to advertising for anything today.
 
Moonglow said:
The banks own the Pay Day loans and should not be charging so much,,,meanwhile to get a 10k loan from a bank, the interest is not always that low and the fees are around $2,500.00
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You have to shop out loans. That's why the FCRA requires that they all disclose the APR up front, so you can shop. All unsecured loans from any bank will always have a higher interest rate than a collateralized loan will. They assume the risk.

Banks aren't in the payday loan business. Their regulators don't allow them to be.
 
Moonglow said:
They usually sue you and garnish wages...
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Assuming the wages are garnishable. In California, at least, you cannot garnish welfare or SSI, which is why most of these companies don't allow you to use that as income. Some will fake employment with burner cells, but if you take them to small claims court and they actually show up, they still have no income that the courts can garnish and the company loses.
 
Moonglow said:
The banks own the Pay Day loans and should not be charging so much,,,meanwhile to get a 10k loan from a bank, the interest is not always that low and the fees are around $2,500.00
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Where did you get the idea that the banks own payday loan companies? That's absurd. And why would anyone in their right mind pay 25% interest? You'd have to have really horrible credit to get those terms, you probably couldn't get any kind of loan from anyone at that point.
 
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