Proposed Payday Loan Regulations to Help Millions Avoid Cycle of Debt

Today AARP submitted a letter to the Consumer Financial Protection Bureau (CFPB) commenting on the agency’s proposal to regulate the payday lending industry. For years, many of AARP’s state offices have engaged their state legislatures and governors to secure consumer protections for Americans who find themselves in need of the small-dollar loans that the payday industry offers. According to the Pew Charitable Trust, 12 million Americans use payday lending per year, on average spending about $520 on interest on an average …

Consumer Agency May Clamp Down on Payday Lenders

The Consumer Financial Protection Bureau (CFPB) is proposing new rules to restrict high-cost payday and car-title loans that often leave borrowers in worse financial shape. The agency can’t do anything about the interest rates charged — that’s up to the states — although it does have the authority to regulate the lenders making these loans. “Too many short-term and longer-term loans are made based on the lender’s ability to collect and not on a borrower’s ability to repay,” CFPB Director Richard Cordray …

AG After You? Don’t Buy This Lie

The latest mask worn by scamming debt collectors is a real slap in the face, given that the con artists pose as the very state agencies that go after them. At least three attorneys general offices (New York, Virginia and Missouri) have recently issued warnings about being spoofed. Impersonating the attorney general or reps of that official, crooks threaten consumers with arrest unless a supposed debt is immediately paid. That’s the same bogus line used in ongoing schemes by impostor collectors …

Payday Lender Ordered to Pay $10 Million Over Collection Practices

Ace Cash Express, one of the nation’s largest payday lenders, has agreed to pay a $10 million settlement over its collection practices. The Consumer Financial Protection Bureau said that Ace, based in Irving, Tex., must refund $5 million to customers who fell victim to such practices from March 2011 to September 2012; it must also pay a $5 million civil penalty. Payday loans are taken out by people who need quick cash between paychecks. Companies such as Ace Cash Express have been known …

New York Cracks Down on Sites With Payday Loan Ties

Ida Bibbs, a 71-year-old grandmother from New York City, wasn’t looking for a loan online, but who could resist a solicitation promising quick and easy money? No banks. No credit checks. The result, as it turned out, was a suffocating debt trap. Bibbs says she took out one high-interest, short-term loan after another from payday lenders online. First she borrowed $400, then $300 and finally $500, all in the last year.  She used the money to pay her rent – she’d …

Retirees Borrow Against Pensions at Loan Rates Up To 106%

UPDATE: Last week, we cited a report by The New York Times that a growing number of older adults are using their pensions as the basis to borrow cash — and paying interest rates as high as 106 percent. That report caught the attention of New York banking regulators. They’re now probing 10 companies that do pension advances, the Times reported Tuesday. Benjamin M. Lawsky, who heads the Department of Financial Services (DFS), calls pension advances ”nothing more than payday …