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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
Like I said, my wife worked for one, and yes they can tell if you have another one out already.

Payday loan activity generally does not show up on the credit reports you get from the three major national credit reporting agencies (Equifax, Experian, and Trans Union). However there are specialty credit reporting agencies that collect some of your payday loan history. It is possible that lenders may access this information when considering you for future loans.

In addition, if you don’t pay your loan back and your lender sells your payday loan debt to a debt collector, it is possible the debt collector would report this debt to one of the major national credit bureaus. Debts in collection could impact your credit.

Likewise, some payday lenders bring lawsuits to collect unpaid payday loans. If you lose a court case related to your payday loan, this fact could appear on your credit report and may affect your credit score., some payday lenders bring lawsuits to collect unpaid payday loans. If you lose a court case related to your payday loan, this fact could appear on your credit report and may affect your credit score.

http://www.consumerfinance.gov/askcfpb/1635/if-i-take-out-payday-loan-could-it-hurt-my-credit.html
 
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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.

Greetings, Cephus. :2wave:

Thanks for answering my questions. :thumbs: From what I've been reading here, they must charge a very high rate of interest. Is that the reason some are asking for more regulation on those types of lenders? I don't know if that's fair, since the lender is taking a risk, as all lenders do, but no one is coerced into asking for such a loan, so if a person agrees to pay a very high rate of interest, isn't that their business, and not something the government should get involved in? It does sound like Payday Lenders do serve a niche that is apparently needed by some people.
 
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.

How Big Banks Finance Billions In Predatory Payday Lending

– Major banks provide over $1.5 Billion in credit available to fund major payday lending companies.
How Big Banks Finance Billions In Predatory Payday Lending | ThinkProgress

I will say that I will need to change my claim, I was a little wrong, but, banks do work with payday loans giving them credit....Which is a form of financing...
 
Greetings, Cephus. :2wave:

Thanks for answering my questions. :thumbs: From what I've been reading here, they must charge a very high rate of interest. Is that the reason some are asking for more regulation on those types of lenders? I don't know if that's fair, since the lender is taking a risk, as all lenders do, but no one is coerced into asking for such a loan, so if a person agrees to pay a very high rate of interest, isn't that their business, and not something the government should get involved in? It does sound like Payday Lenders do serve a niche that is apparently needed by some people.

Hey there Polgara, it's beyond predatory, and it needs to and will be reigned in.

Payday lending has exploded in the last few years. Colorado is one of the few states with an industry-wide annual report available. For 1997, the Attorney General reported that 188 lenders made 374,477 post-dated check loans totaling $42,823,089. The average annual percentage rate charged on these loans was 485.26%. The average term for loans was 16.58 days. Over 58,000 of these loans, or 15.5%, were refinanced. For the year ended 12/31/97, Washington reported 562,031 loans made by check cashers. These loans were for a total of $144,923,986. The average size loan was $255. Lenders collected $21,541,338 in fees and charged off $2,054,338. Indiana reports that the number of payday lenders jumped from 11 in 1995 to 59 in 1997, with loan volume increasing from $12,688,599 in 1995 to $98 million in 1997.


Oh, and look at the polling numbers, there's only three individuals (thankfully) that think 425% is just ok!!
 
Greetings, Cephus. :2wave:

Thanks for answering my questions. :thumbs: From what I've been reading here, they must charge a very high rate of interest. Is that the reason some are asking for more regulation on those types of lenders? I don't know if that's fair, since the lender is taking a risk, as all lenders do, but no one is coerced into asking for such a loan, so if a person agrees to pay a very high rate of interest, isn't that their business, and not something the government should get involved in? It does sound like Payday Lenders do serve a niche that is apparently needed by some people.

The govt. is seeking to have the Pay Day loans work within the state laws they operate in and not it's home company state that may have different laws than the state the loans are made..
 
Greetings, Cephus. :2wave:

Thanks for answering my questions. :thumbs: From what I've been reading here, they must charge a very high rate of interest. Is that the reason some are asking for more regulation on those types of lenders? I don't know if that's fair, since the lender is taking a risk, as all lenders do, but no one is coerced into asking for such a loan, so if a person agrees to pay a very high rate of interest, isn't that their business, and not something the government should get involved in? It does sound like Payday Lenders do serve a niche that is apparently needed by some people.

They only charge 15% last I knew, which is pretty low considering the 22% that a lot of credit cards charge. Of course, there are a lot of people around here who have an agenda and therefore, are only too happy to fudge the numbers to support their irrational claims. It is indeed the business of the person who goes in and signs up for a loan, the conditions are explained and nobody leaves not knowing what they're getting themselves into. They put their name on the line, they take responsibility for their actions.
 
How Big Banks Finance Billions In Predatory Payday Lending

– Major banks provide over $1.5 Billion in credit available to fund major payday lending companies.
How Big Banks Finance Billions In Predatory Payday Lending | ThinkProgress

I will say that I will need to change my claim, I was a little wrong, but, banks do work with payday loans giving them credit....Which is a form of financing...

How in the hell do you get there? If a mobster qualifies for a credit card, does that mean that credit card companies are funding the mob? Seriously? :roll:
 
Hey there Polgara, it's beyond predatory, and it needs to and will be reigned in.

Payday lending has exploded in the last few years. Colorado is one of the few states with an industry-wide annual report available. For 1997, the Attorney General reported that 188 lenders made 374,477 post-dated check loans totaling $42,823,089. The average annual percentage rate charged on these loans was 485.26%. The average term for loans was 16.58 days. Over 58,000 of these loans, or 15.5%, were refinanced. For the year ended 12/31/97, Washington reported 562,031 loans made by check cashers. These loans were for a total of $144,923,986. The average size loan was $255. Lenders collected $21,541,338 in fees and charged off $2,054,338. Indiana reports that the number of payday lenders jumped from 11 in 1995 to 59 in 1997, with loan volume increasing from $12,688,599 in 1995 to $98 million in 1997.


Oh, and look at the polling numbers, there's only three individuals (thankfully) that think 425% is just ok!!

Greetings, Montecresto. :2wave:

Wow! 485% yearly interest on a loan? Damn! I noticed a new lender opened recently near my daughter-in-laws house - it used to be a Wendy's drive through for years - so the need must be there. I guess the borrower didn't pay as agreed, and interest charges just kept getting on, but that is astonishing! It's unfortunate that the people who need them the most are the ones being hurt, though. *shaking head in commiseration for them*
 
Greetings, Montecresto. :2wave:

Wow! 485% yearly interest on a loan? Damn! I noticed a new lender opened recently near my daughter-in-laws house - it used to be a Wendy's drive through for years - so the need must be there. I guess the borrower didn't pay as agreed, and interest charges just kept getting on, but that is astonishing! It's unfortunate that the people who need them the most are the ones being hurt, though. *shaking head in commiseration for them*

That's a total load of crap, as has been explained. They've got an agenda and are only too willing to lie through their teeth to support it.
 
Greetings, Montecresto. :2wave:

Wow! 485% yearly interest on a loan? Damn! I noticed a new lender opened recently near my daughter-in-laws house - it used to be a Wendy's drive through for years - so the need must be there. I guess the borrower didn't pay as agreed, and interest charges just kept getting on, but that is astonishing! It's unfortunate that the people who need them the most are the ones being hurt, though. *shaking head in commiseration for them*

To the bolded, it wasn't just a borrower, if you look again, you'll see that of all the loans made in the state of Colorado, the AVERAGE was 425%! That's the states records talking, not posters with any agenda. Payday loan lenders will be seeing tighter regulation, it's only a matter of time.
 
The borrower has to sign a new agreement. Payday loans aren't evergreen loans.

It ends up being a semantic argument. Regardless of the fact that you go in and sign a new agreement, you roll the loan over and continue to pay fees on the initial loan amount.
 
Rhetorical question? I don't know. The government is the one who made loan sharks illegal, I think.

I'm sure most people would rather go to a lender that has some semblance of decorum than Vinnie and his boys. I never heard of payday lenders breaking kneecaps or leaving horse heads in beds when the debt wasn't paid.

Vinnie and boys still probably charge lower fees for the loan.
 
Then by all means, go there. :roll:

The point is these payday lenders are leaches upon the communities they are in, just like a loan shark. If you are poor and living paycheck to paycheck and you don't have the money out of this paycheck to make your expenses then its not doing you any good to take a loan at high rates to pay for expenses this check was insufficient for against your next paycheck that will be just as insufficient.
 
The point is these payday lenders are leaches upon the communities they are in, just like a loan shark. If you are poor and living paycheck to paycheck and you don't have the money out of this paycheck to make your expenses then its not doing you any good to take a loan at high rates to pay for expenses this check was insufficient for against your next paycheck that will be just as insufficient.

Hardly. You don't just get to run around and declare your uninformed opinions to be fact.
 
And it has been explained to you why those stats are skewed and incorrect. I don't expect you to listen to reality though.

No, you argued with them using a semantics argument. Regardless of whether a rollover requires taking out a new loan agreement every week, you still pay fees on the loan just like you would if it were a revolving credit card with an insanely high interest rate. So sorry, but I am taking the published findings of the CFPB over random Joe's opinion on the internets.
 
Are you a payday loan lender, lol?

Actually, I helped the friend of a friend set up a store a long time ago, went through all of the training, etc. So I'm a hell of a lot closer to you. What's your experience?
 
It ends up being a semantic argument. Regardless of the fact that you go in and sign a new agreement, you roll the loan over and continue to pay fees on the initial loan amount.

No, it isn't a semantics. You pay interest on the new loan. You agree to take the new loan. You keep talking about revolving credit cards in this discussion, too. This isn't a revolving loan.
 
The point is these payday lenders are leaches upon the communities they are in, just like a loan shark. If you are poor and living paycheck to paycheck and you don't have the money out of this paycheck to make your expenses then its not doing you any good to take a loan at high rates to pay for expenses this check was insufficient for against your next paycheck that will be just as insufficient.

So then the poor people shouldn't borrow money from them. Problem solved. What's the issue?
 
Actually, I helped the friend of a friend set up a store a long time ago, went through all of the training, etc. So I'm a hell of a lot closer to you. What's your experience?

You are??? Anyway, I figured you had a hand in it somewhere.
 
No, it isn't a semantics. You pay interest on the new loan. You agree to take the new loan. You keep talking about revolving credit cards in this discussion, too. This isn't a revolving loan.

Because it works the same way. I get a loan for 300 dollars. I don't have the money to pay it off so I pay the fees for the loan and get a new loan for the amount borrowed with fees on that loan. I then don't have the money to pay it off so I get a new loan for the original amount borrowed with fees on that loan. How is that in practice any different in terms of how much you end paying in interest and fees than a revolving loan with a triple digit interest rate?
 
Because it works the same way. I get a loan for 300 dollars. I don't have the money to pay it off so I pay the fees for the loan and get a new loan for the amount borrowed with fees on that loan. I then don't have the money to pay it off so I get a new loan for the original amount borrowed with fees on that loan. How is that in practice any different in terms of how much you end paying in interest and fees than a revolving loan with a triple digit interest rate?

So then never take a loan from a payday lender and you won't have any problems.

Installment loans and revolving credit loans don't work the same way, by the way. Not at all.
 
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