Los Angeles, CA
February 2, 2015. Payday loans have long been a source of numerous consumer complaints. The federal government, troubled by these numerous complaints, is putting together first ever legislation aimed at regulating this high interest lending industry. The Consumer Financial Protection Bureau (CFPB) reports the top three states for Payday Loan lending complaints are Texas, California, and Ohio.
The federal government is stepping into this space not only because of complaints but also legal loopholes at the state level. The Payday lending space is a massive $46 billion dollar industry. The CFPB seeks to provide fuller disclosure of high interest rates the reach 300% with some lenders. The proposed legislation due sometime this year is surprisingly the first time the CFPB has attempted to regulate the Payday Loan industry. Currently 32 states permit Payday lending interest rates to go as high as triple digits or have no interest rate cap at all. Unfortunately, the CFPB cannot regulate interest rates under the law, but can determine lending practices to be unfair, abusive to consumers, or deceptive.
The reality now is that many consumers cannot wait for this legislation. They have already fallen into a debt spiral with Payday loans that cannot be broken due to high interest rates, fees, and penalties. Break the cycle with a qualified debt settlement attorney. A qualified debt settlement attorney will negotiate with these aggressive lenders for large reductions in the principal balance owed.
Author: Kevin Fallon McCarthy