Payday Lending Is Focus of Consumer Bureau Alabama Hearing
(Updates with Cordray comments on state and local activism starting in seventh paragraph.)
Jan. 19 (Bloomberg) -- U.S. Consumer Financial Protection Bureau officials, holding their first public hearing since Richard Cordray was installed as director, gathered information on so-called payday lending as they plan oversight of firms faulted for taking unfair advantage of low-income borrowers.
“The purpose of all our research and analysis and outreach on these issues is to help us figure out how to determine the right approach to protect consumers and ensure that they have access to a small-loan market that is fair, transparent and competitive,” Cordray said at the field hearing today in Birmingham, Alabama.
The consumer bureau, created by Congress under the Dodd- Frank Act, will oversee payday lenders as part of its nonbank supervision authority, which took effect when Cordray was seated by President Barack Obama in a recess appointment on Jan. 4. The bureau’s work will be driven by research and supervision, and its enforcement efforts will target practices that pose “immediate risk to consumers and are clearly illegal,” Cordray said at the hearing, where officials heard testimony from the industry, consumer groups and the public.
Action by the consumer bureau could hit big payday lenders such as Advance America Cash Advance Centers Inc., the nation’s largest, and QC Holdings Inc. It could also affect companies that are mainly pawnbrokers but offer payday loans, such as Cash America International Inc., EZCORP Inc. and First Cash Financial Services Inc.
New Regulations
Cordray, 52, made no mention of new regulations or any idea that payday lending should be explicitly restricted. “We are thinking hard about these issues, and we do not have all the answers worked out by any means,” said Cordray, a former Ohio attorney general who served as the consumer bureau’s enforcement director before taking the top job.
good pay day loans - News
When calculated as an annual percentage rate -- as required under the Truth in Lending Act -- interest on payday loans can range as high as 521 percent, according to the consumer bureau. This has led groups such as the Consumer Federation of America to
Did you know that high interest loans, like payday loans are typically doing more harm than good for American Borrowers? Many of these loans have annual percentage rates equivalent to 350% ! Low income families who don't meet requirements for a
The committee has beaucoup bucks at its disposal to make sure that payday loan shops retain the right to lend people money at annual percentage rates that average 445 percent and can legally reach as high as 1950 percent. A petition drive supported by
Marc Anthony Fusaro to conduct a comprehensive study to determine whether the high interest rates on these so-called payday loans cause borrowers to be trapped in a “cycle of debt.” Fusaro was the principle investigator for this new study. Prof.
But even the Credit Counselling Society — no advocate for the payday-loan industry — doesn't appear to be in favour of limiting or banning payday-loan companies. "[Banning] looks good in theory, but it doesn't do anything to curb demand," Hannah said
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Is a Pay Day Loan Ever a Good Idea?: The number of companies offering “payday loans” has risen almost beyond bel...