I was reading the paper last night and ran across a brief on payday lenders. I know that alot of people have trouble with them so I thought I would list what I read:
Internet and out-of-state companies that market payday loans To PA residents will need to be licensed By Feb 1,2009.
The new policy is a reversal by state regulators, who previously applied the states Consumer Discount Co. Act only to businesses with facilities or employees located in PA.
The law outlines how much interest and fees non-bank businesses can impose for non-mortgage loans up to $25,000.
The new approach addresses the rising prevalence of internet lending activity, especially internet payday lenders, which has left PA consumers vulnerable to practices that our laws were intended to prohibit.
If the companies do not comply with the new rules they can face fines and other penalties.
Isn't it about time these payday lenders got some limitations put on them? I was glad to read this article.
Forums
that is good news
Thanks fireyone! I reside in PA myself and this is great news. I've learned my lesson about PDL companies many years ago. I think all the new laws will do is cause internet and out of state PDL companies to stop offering them to residents in PA which isn't a bad thing at all. If anyone in PA or anywhere for that matter is interested in a PDL than you should really consider visiting a local office where you can sit down with someone and decide if its right for you, but first and foremost, begging and pleading your friends and family to loan you some money would be a much better idea to consider!
Thanks again!
I tell ya I myself was really happy to read this brief. As soon as I saw it I thought "I gotta tell that to the community". It is really nice to know that in the future if people do find themselves with no where to turn except these payday lenders then at least how much interest they can charge will be capped. I also really liked the idea of having them become licensed. There are probaly so many under handed companies out there that maybe this new ;law will get rid of at least some of them. What part of PA cbass?
They will find loop holes, I will give you a good example, cashnetusa, they lend to Pennsylvania residents under the law of Nevada, some how they do it. If you google them and read through there page you will find how they do it there. I have filed a complaint with the attorney generals office and the department of banking, the way the do it is legal, it is a loophole.
Best thing to do is to educate yourself and not to over spend, budget your money and try to stay away from these lenders all together.
I have burned and learned with these lenders. The best medicine is to do as I have said above and stay away from them all together.
Thank you for the post though fireyone, it may deter the majority of them, hopefully it will discourage people from using them also. May I ask what paper the article was in????
Indiana Gazette. As long as it does deter some of them then it was worth the try. At least people in higher places eyes are being opened. Maybe there will be more good results and laws in the near future. I believe being able to put a cap on what they can charge may keep a lot of newer business fromopening up in this field. Once things become tighter it sometimes deters interst in the business.
I guess you are right, it may deter some of the smaller ones and another good thing is that they may have to actually offer descent rates so they may be more competitive to the consumer too, we will have to sit back and watch what happens, should be interesting to see.
It really will be interesting. They were stating in the paper that it was absurd amount of interest and they were trying to make it so that it couldn't be more than a mortgage rate. Hope it happens. I never had any dealings with them but I really feel like they take advantage of people in need of financial help and put them in worse situations than they started with. I would consider these type of lenders more along the lines of loan sharks.
Yes, if there is some upper limit on the interest charged on payday loans, a lot of people will be benefited and people will not fear taking payday loans. I agree with Fireyone on the point that these payday lenders take advantage of the people with financial distress and charge high rates of interest which push people to a vicious circle of debt.
Then they may actually lower their rates some to conform to the new laws, but I doubt it, they will probably go for a loophole in the law.
debt
I live in PA, too. Some of the PDL's, I had gotten, were from Canada. So, they went by THEIR 'rules and guidelines.' Wow!! The article was interesting. Do you ( in general) think the PDL's willREALLY drop their %..according to laws? I don't think they would.
Just out of curiosity I went on check n go website, they no longer offer installment loans or payday loans to Pennsylvania residents. This is one that I have dealt with in the past. It says that they are working out alternative package to conform with our state laws and regulations. check it out, it is already working, they will probably lower there crazy intrest rates.
good, maybe it will wake a few of them up and let them drop those crazy rates then, they may actually turn into a useful product afterall.
The only downfall is the people who alread y took out and are paying on their past loans. I wondr if they will have to revise them and bring them up to standards according to PA law. At least something will be changing in the near future but even so I wish people would avoid these scammers all together.