Payday Loan Debt Problems?
Will Payday Loans End Up Regulated?
The payday loan industry pulls in roughly $46 billion a year, and it mainly does so by evading regulation., as payday debt continues to pile up for consumers. To quote the New York Times: “they are chameleons: payday lenders that alter their practices and shift their products ever so slightly to work around state laws aimed at stamping out short-term loans that can come with interest rates exceeding 300 percent.”
The Consumer Financial Protection Bureau (CFPB), i.e. Obama’s financial watchdog, announced that new federal regulations are impending for the payday loan industry. The CFPB has been studying the industry for years now, and has finally ready to start reform.
Highly anticipated changes include a possible 36% APR cap, no rollovers, and an ability-to-repay standard. These changes could have serious impact on the payday loan industry and the millions that rely on payday loans to cover basic living expenses. As the New York Times reports, “[n]early 70 percent of borrowers use the loans to cover basic expenses, with only 16 percent tapping the loans for emergencies . . ..”
If you are struggling in the payday loan debt cycle and can’t get out, don’t wait around for regulations to change the game. Consider hiring an attorney who can advocate on your behalf now. A debt settlement attorney will negotiate directly with your lenders for substantial reductions on the amount owed. They can also help you deal with any harassing phone calls or threats.