U.S. Senator Dick Durbin proposes national 36% cap on payday loans’ APR
July 18, 2008 | DC, regulation | Comments (2)Realizing that the Federal government was missing the boat on regulating an entire industry out of existence, Senator Durbin of Illinois introduced legislation that would do just that. His press release states:
“Within blocks of my home in Springfield, Illinois, there are payday lenders charging interest rates of two and three hundred percent of the value of the loan,” Durbin said. “These excessive rates are often hidden and can have crippling effects on those individuals who can afford it least. Congress must enact protections against predatory lending. America’s working families depend on it.”
The fees of a CFSA member’s payday loan are never hidden and the “two and three hundred percent” interest rates are unfairly extrapolated annual percentage rates (as required by law) that are being applied to two-week termed loans.
The Payday Pundit can only assume that Senator Durbin’s legislation provides for some kind of magical short termed loan with lower fees than what a highly competitive industry currently offers. We should all sleep soundly knowing we can depend on Senator Durbin and the U.S. Senate — we have to… now that we can no longer depend on the option of short-term payday loans in an emergency.
Comments»
I do understand that the % rate seems high but at the same time this is a very short term loan, and i have worked in the business and there a never no hidden fees..why not look into lowering the interest rate or put a limit on how many a consumer can do, because if u cut it out all around everyone will pay..The consumer, the employees and their families…I
Can you please provide a list of contributors to Sen. Durbin’s campaign or PAC or whatever (The Durbin Library) to see if there are potential beneficiaries of this latest legislation, esp banks who would reap the benefit of more bounced check fees for example.