Posts Tagged ‘regulating payday lenders’

Wisconsin Legal Aid Attorneys Fight For Interest Rate Cap On Payday & Car Title Lending

Wisconsin Legal Aid attorneys Andy Gehl and Bruce Speight say that the only way to protect consumers against what they call “irresponsible loan products” is to introduce an interest rate cap on payday and car note loans.

The attorneys contend that payday lending and car title lending all too often lead to a revolving cycle of debt and that the way these loans are structured prevents people from being able to repay them.  These types of loans have interest rates that exceed 400% on an annualized basis and the true costs of financing are often concealed from the borrower.

There are presently two bills to regulate payday lending  and  car note lending under consideration by the Wisconsin Legislature and neither of them contain the cap. Attorneys Gehl and Speight say that without an interest rate cap, the lenders will simply alter their product to conform to the letter of the law without also conforming to the spirit of the law. In other words, it will be business as usual for these companies.

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