Obama Administration May Crack Down on Payday Loan Companies
Jan 16, 2009
As banks have been cutting Americans’ credit lines on credit cards and refusing to issue cards to new applicants, more and more Americans have turned to another source of short-term emergency cash: Payday loans. Although the payday lending industry is experiencing a boom now, all of that may change when President-Elect Obama takes office.
Obama has pledged to crack down on the payday loan industry, which critics say charges usurious interest rates and takes advantage of poor and uneducated Americans.
Plans that Obama has specified would include a 36 percent cap on the interest payday loan companies can charge and simplified information about loan fees, payments, and penalties. For example, payday lenders currently may make it very easy for borrowers to “extend their loan” and postpone payment, but often do not disclose the additional fees or finances charges that will be added to their balance.
On Jan 21, 2009, cindy shipley said:
Mr.Obama should crack down on the media I know for a fact that payday loan companies are not booming, business for most part is down some up to 20%.Also get your facts straight if you really want to? Payday lenders charge no interest but rather a fee to hold personal checks for up to 30 days.The interest drama presented by the media is exactly like the Salem Witch Hunts.
On Jan 21, 2009, Ms. Clark said:
It would be ridiculous to consider (in essence) banning an entire industry when the economy is already crippled. What purpose would it serve and how would it benefit citizens? It would not only eliminate tens of thousands more jobs but also possibly eliminate the positions of the state auditors and examiners that are in charge of monitoring theses institutions. That means additional job losses at all levels and the potential rise of true and illegal “loan sharks.” Historically, prohibition has only led to greater demand and disaster.