Credit loans and
payday lenders differ in other ways that seem subtler but may matter just as much to consumers.
One active debate in that controversy is about whether prevailing rates/fees charged by
payday lenders are "too high." (1)
Payday lenders argue that rates/fees for payday loans do not yield economic profit once one accounts for the full economic costs of being in the business.
Payday lenders are about to come under the microscope.
While some 14 other states have banned
payday lenders (also called "short-term lenders" or "deposit lenders"), the industry has found fertile soil in Utah with more than 500
payday lenders.
Earlier this year, the justices ruled that the surety bonds that the Check Cashers Act required the
payday lenders to post were available to pay court-ordered damages to victims.
"My office will continue to take aggressive action to stop
payday lenders from victimizing New York consumers."
In the absence of
payday lenders, some borrowers would be forced to deal with illegal lenders that provide no consumer protection.
One hundred years ago, the leading critic of "salary loan lending" called such people "sharks, leeches and remorseless extortioners." Today's consumer advocates call
payday lenders "predatory" and "legal loan sharks."
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payday lenders