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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
Only a fool tries to protect people from their own irresponsibility or stupidity. You can protect them from being taken advantage of. Nobody is taking advantage of these people, they made their own bed, now they have to lie in it.

No, actually they don't, and they won't, because rational minds will rule the day on this and regulation is on its way.
 
Payday lenders don't break peoples' legs when they don't pay. Loan sharks do. Over regulating these payday lenders out of business will hurt the people that need them even further.
So replace them with actual credit/budget counseling and not those working for the debt collectors
 
That's idiotic. The only way for the interest to be 300% is to charge $900 for a loan of $300. Try again.

So, How do you Calculate the True Annual Percentage
Rate on a Payday Loan?
You will need to know three things before you start, as follows:
First, what is the amount of credit the borrower will receive (Amount Financed) = i.e., $350.00.
Second, what is the dollar amount the credit will cost (Finance Charge) = i.e., $50.00.
Third, what is the term of the loan = i.e., 14-days.
Step 1 – Divide the total Finance Charge ($50.00) by the Amount Financed - the amount the
borrower will receive ($350.00) = 0.142857.
Step 2 – Multiply the answer (0.142857) by the number of days in the year (365) = 52.142857.
Step 3 – Divide the answer (52.142857) by term of the loan (14-days) = 3.724489.
Step 4 – Move the decimal point to the right two places and add a percent sign = 3.724489
becomes 372.45% Annual Percentage Rate (see note below).
What if you Know the Cost per $100.00 and Want to
Convert That to a True Annual Percentage Rate?
You will need to know three things before you start, as follows:
First, what is the amount of credit the borrower will receive (amount Financed) = i.e., $500.00.
Second, what is the cost for the loan per hundred = i.e., $20.00 or 20%.
Third, what is the term of the loan = i.e., 14-days.
Step 1 – Divide the Amount Financed - amount the borrower will receive ($500.00) by 100 = 5.
Step 2 – Multiply the answer (5) by the amount per hundred ($20.00 or 20%) to find the total
Finance Charge = $100.00.
Step 3 – Divide the total Finance Charge ($100.00) by the amount the borrower will receive
($500.00) = 0.2.
Step 4 – Multiply the answer (0.2) by the number of days in the year (365) = 73.
Step 5 – Divide the answer (73) by term of the loan (14-days) = 5.214285.
Step 6 – Move the decimal point to the right two places and add a percent sign = 5.214285
becomes 521.43% Annual Percentage Rate (see note below).
Note: Annual Percentage Rate always has no more than two places to the right of the decimal point.

http://www.stoppaydaypredators.org/pdfs2/aaapl_howtocal.pdf


maybe, just maybe you might want to listen up once in a while

the only thing idiotic was your response
 
If you need a loan then ensure you can pay it back. As long as there is no lying on the part of creditors about rates of paying back, I see no issue. If people are dumb enough to take out a loan at 300%, sorry, but nothing the government can do will help you.
 
So replace them with actual credit/budget counseling and not those working for the debt collectors

There are credit counseling agencies all over the country. In every state. HUD counseling. Debt consolidation programs. Debt management programs. Under the FCRA and also Reg B there are very often Consumer Counseling agencies recommended in Adverse Action Notices. These agencies exist already.
 
No, actually they don't, and they won't, because rational minds will rule the day on this and regulation is on its way.

It's funny how you equate "rational minds" and "government. Really.
 
So, How do you Calculate the True Annual Percentage
Rate on a Payday Loan?
You will need to know three things before you start, as follows:
First, what is the amount of credit the borrower will receive (Amount Financed) = i.e., $350.00.
Second, what is the dollar amount the credit will cost (Finance Charge) = i.e., $50.00.
Third, what is the term of the loan = i.e., 14-days.
Step 1 – Divide the total Finance Charge ($50.00) by the Amount Financed - the amount the
borrower will receive ($350.00) = 0.142857.
Step 2 – Multiply the answer (0.142857) by the number of days in the year (365) = 52.142857.
Step 3 – Divide the answer (52.142857) by term of the loan (14-days) = 3.724489.
Step 4 – Move the decimal point to the right two places and add a percent sign = 3.724489
becomes 372.45% Annual Percentage Rate (see note below).
What if you Know the Cost per $100.00 and Want to
Convert That to a True Annual Percentage Rate?
You will need to know three things before you start, as follows:
First, what is the amount of credit the borrower will receive (amount Financed) = i.e., $500.00.
Second, what is the cost for the loan per hundred = i.e., $20.00 or 20%.
Third, what is the term of the loan = i.e., 14-days.
Step 1 – Divide the Amount Financed - amount the borrower will receive ($500.00) by 100 = 5.
Step 2 – Multiply the answer (5) by the amount per hundred ($20.00 or 20%) to find the total
Finance Charge = $100.00.
Step 3 – Divide the total Finance Charge ($100.00) by the amount the borrower will receive
($500.00) = 0.2.
Step 4 – Multiply the answer (0.2) by the number of days in the year (365) = 73.
Step 5 – Divide the answer (73) by term of the loan (14-days) = 5.214285.
Step 6 – Move the decimal point to the right two places and add a percent sign = 5.214285
becomes 521.43% Annual Percentage Rate (see note below).
Note: Annual Percentage Rate always has no more than two places to the right of the decimal point.

http://www.stoppaydaypredators.org/pdfs2/aaapl_howtocal.pdf


maybe, just maybe you might want to listen up once in a while

the only thing idiotic was your response

Oh good, you're basing your funny math on a site dedicated to opposing payday loans. Sure, that's kosher. :roll:
 
There are a lot of poor people who don't have bad credit. Payday loans are NOT designed for "poor people" - they are designed for people who can not get a loan elsewhere.

"Bad credit" doesn't come from not making a lot of money. It comes from not paying your obligations on time.

The point is they would be better off not getting the loan with the terms it has. Its predatory any way you spin it. Its not like poor people are staving in states and communities that ban payday lenders.
 
Oh good, you're basing your funny math on a site dedicated to opposing payday loans. Sure, that's kosher. :roll:

A payday loan — that is, a cash advance secured by a personal check or paid by electronic transfer is very expensive credit. How expensive? Say you need to borrow $100 for two weeks. You write a personal check for $115, with $15 the fee to borrow the money. The check casher or payday lender agrees to hold your check until your next payday. When that day comes around, either the lender deposits the check and you redeem it by paying the $115 in cash, or you roll-over the loan and are charged $15 more to extend the financing for 14 more days. If you agree to electronic payments instead of a check, here’s what would happen on your next payday: the company would debit the full amount of the loan from your checking account electronically, or extend the loan for an additional $15. The cost of the initial $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Payday Loans | Consumer Information

education, and the ability to comprehend are wonderful things

if you cant get it from here, you are hopeless
 
A payday loan — that is, a cash advance secured by a personal check or paid by electronic transfer is very expensive credit. How expensive? Say you need to borrow $100 for two weeks. You write a personal check for $115, with $15 the fee to borrow the money. The check casher or payday lender agrees to hold your check until your next payday. When that day comes around, either the lender deposits the check and you redeem it by paying the $115 in cash, or you roll-over the loan and are charged $15 more to extend the financing for 14 more days. If you agree to electronic payments instead of a check, here’s what would happen on your next payday: the company would debit the full amount of the loan from your checking account electronically, or extend the loan for an additional $15. The cost of the initial $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Payday Loans | Consumer Information

education, and the ability to comprehend are wonderful things

if you cant get it from here, you are hopeless

It's not an annual percentage rate because the term of the individual loan is 14 days. Try again.
 
It's funny how you equate "rational minds" and "government. Really.

Its rational minds like the ones participating in this thread (exhibit A: the polling numbers) that press the government on things like this.
 
It's not an annual percentage rate because the term of the individual loan is 14 days. Try again.


no thanks

as my father use to exclaim, you can lead a horse to water, but you cant make em drink

get someone else to play.....

math and finance seem to be over your head.......

and let me know if you ever see any loan advertised anywhere where the APR (annual percentage rate) isnt disclosed
 
It's not an annual percentage rate because the term of the individual loan is 14 days. Try again.

It is a predatory business model.
Figure the interest - fees any way you wish- it is predatory- if there was not gold in them hills, there would not be so many in the business.
Reason we have laws, regulations to protect people. At times from themselves, yes but that does not detract from the necessity of such laws/regulations.
 
It's not an annual percentage rate because the term of the individual loan is 14 days. Try again.

And statistically 80% of those loans get rolled over well past the 14 days. CFPB Finds Four Out Of Five Payday Loans Are Rolled Over Or Renewed > Newsroom > Consumer Financial Protection Bureau

Those that utilize payday lenders routinely roll over loans and stay in debt as much as 11 months. Its not uncommon for their fees to exceed the amount borrowed. If we are going to allow payday lenders why not just say to hell with it and legalize loan sharks.
 
The point is they would be better off not getting the loan with the terms it has. Its predatory any way you spin it. Its not like poor people are staving in states and communities that ban payday lenders.

They would be "better off" not getting the loan? Then set up a fund to help the poor people. For the people with bad credit, this is the only way they can borrow money quickly for an emergency until their next paycheck comes in.
 
I didn't ask you what the usury laws are. I asked you what state you're talking about where a bank can charge whatever they want for an interest rate at the state says "no problem".

I gave you the list that includes my state and many others. Apparently you do not understand the concept.
 
no thanks

as my father use to exclaim, you can lead a horse to water, but you cant make em drink

get someone else to play.....

math and finance seem to be over your head.......

and let me know if you ever see any loan advertised anywhere where the APR (annual percentage rate) isnt disclosed

The APR is advertised because it's a law. The Fair Credit Reporting Act (FCRA) requires disclosure of the APR for comparison purposes, so the applicants can compare loan APRs between lenders.

The APR isn't terribly relevant to someone who needs $1000 and pays it back when he gets his next paycheck, which is what the purpose of payday loans are.
 
I gave you the list that includes my state and many others. Apparently you do not understand the concept.

I understand it quite well, better than probably anyone else on this board except maybe an attorney who is an expert on lending regulations. I asked you what your state is.
 
They would be "better off" not getting the loan? Then set up a fund to help the poor people. For the people with bad credit, this is the only way they can borrow money quickly for an emergency until their next paycheck comes in.

Yes they would be better off not getting a loan at an exorbitant interest rate to pay for expenses they cannot pay for now due to insufficient income against their future earnings that will be just as insufficient.

Look at the stats on payday loans. Some 80% are rolled over. Many end up paying back more in interest and fees than they borrowed in the first place and many take as many as 11 months to get out of debt for a single payday loan. It is nothing more than a deal with the devil for most of them.
 
Yes they would be better off not getting a loan at an exorbitant interest rate to pay for expenses they cannot pay for now due to insufficient income against their future earnings that will be just as insufficient.

Look at the stats on payday loans. Some 80% are rolled over. Many end up paying back more in interest and fees than they borrowed in the first place and many take as many as 11 months to get out of debt for a single payday loan. It is nothing more than a deal with the devil for most of them.

And I'm focusing on the 20% who take the loans knowing exactly what they're doing. It isn't their problem.

I don't believe in regulations because some people are too dumb to do the right thing.
 
And I'm focusing on the 20% who take the loans knowing exactly what they're doing. It isn't their problem.

I don't believe in regulations because some people are too dumb to do the right thing.

Then why not just legalize loan sharks then?
 
The APR is advertised because it's a law. The Fair Credit Reporting Act (FCRA) requires disclosure of the APR for comparison purposes, so the applicants can compare loan APRs between lenders.

The APR isn't terribly relevant to someone who needs $1000 and pays it back when he gets his next paycheck, which is what the purpose of payday loans are.

tres

are you responding to me, or to him?

i am very aware of the lending laws...i live them on a daily basis

everyone of my managers has to go through additional training every three years, to make sure we stay within all rules and regulations of the truth and lending laws

he was arguing that my calculation of over 300% was idiotic, because it was only a short term loan

what he failed to comprehend, is that the every loan...no matter the amount, time, or type is regulated....and all have to include disclosures of interest paid on an ANNUAL BASIS
 
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