Posted on 10/07/2017 11:33:46 AM PDT by EveningStar
The Consumer Financial Protection Bureaus new rules for payday loans and car title loans have drawn the predictable cries of outrage from lenders, particularly small storefront operators who say the restrictions will put them out of business. And its an understandable complaint after spending five years researching the market for high-cost credit, the bureau has fired a shot right at the heart of these lenders business model.
But the outrage here isnt what the regulators are doing. Its the way these lenders have profited from the financial troubles of their customers. As the bureaus research shows, payday lenders rely on consumers who cant afford the loans they take out. With no way to repay their original loans other than to obtain further ones, most of these customers wind up paying more in fees than they originally borrowed.
Thats the definition of predatory lending, and the bureaus rules precisely target just this problem. They dont prohibit lenders from offering the sort of financial lifeline they claim to provide one-time help for cash-strapped, credit-challenged people facing unexpected expenses, such as a large bill for medical care or car repairs. Instead, they stop lenders from racking up fees by making multiple loans in quick succession to people who couldnt really afford them in the first place.
(Excerpt) Read more at latimes.com ...
Agreed.
Everything should be free. It’s mean to expect people to work.
Hated that commercial.
Damn straight.
It’s only fair.
I cant stand people like those in the article.
They need a caretaker...
They probably do.
This will be a boon for loan sharks.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.