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 …

Mulling a Payday Loan? How Does 322% APR Sound?

In this economic climate of relatively low interest rates, who pays 322 percent in annual interest for short-term loans? Consumers who repeatedly take on payday loans. That’s right. The average consumer who may be short on cash, and gets payday loans to bridge the gap until the next payday, winds up shelling out 322 percent interest or more on the money borrowed. Or put another way, it’s an average $15 interest on every $100 borrowed in a $350 loan over …