Federal Regulators Propose Clampdown On Payday Lenders


TODAY THE FEDS PROPOSED NEW RULES TO REIGN IN THE BUSINESSES THAT OFFER SHORT- TERM LOANS…. WITH VERY HIGH INTEREST RATES. JULIE WATTS IS LIVE WITH DETAILS. AND SOME ALTERNATIVES TO WHEN YOU NEED CASH FAST. WE’VE HEARD NIGHTMARE PAY-DAY LOAN STORIES. TAKING OUT NEW LOANS TO COVER FEES ON OLD LOANS. REVOLVING CYCLES OF DEBT THAT LEAVE PEOPLE WORSE OFF THAN WHEN THEY STARTED. WELL NEW RULES PROPOSED BY THE CONSUMER FINANCIAL PROTECTION BUREAU TODAY MAY HELP TO CURB SOME OF THOSE ISSUES. THE PROPOSED RULES WOULD REQUIRE LENDERS determineTHAT CONSUMERS CAN PAY BACK THE LOAN, INTEREST AND FEES. BEFORE LENDING THE MONEY. IT ALSO LIMITS THE NUMBER OF CONSECUTIVE LOANS THE BORROWER CAN TAKE OUT IN A ROW. AND, IT LIMITS THE NUMBER OF TIMES A LENDER CAN TRY TO DEDUCT MONEY FROM A BORROWERS BACK ACCOUNT… WHICH CAN CURRENTLY LEAD TO THOUSANDS OF DOLLARS IN OVERDRAFT FEES NOw… THERE ARE A GROWING NUMBER OF PAY DAY ALTERNATIVES LIKE ACTIVE HOURS, A BAY AREA STAR UP THAT LETS HOURLY WORKERS COLLECT THEIR PAY AS SOON AS THEY EARN IT. THE COMPANY AUTOMATICALLY WITHDRAWS THEIR PAY CHECK ON PAY DAY. INSTEAD OF INTEREST, THE BORROW PAYS A SO- CALLED TIP OF THEIR CHOOSING. BUT EXPERTS STILL HAVE CONCERNS. We have some concerns because its difficult enough to manage their money so to be able to drawn down your pay check before you’ve been paid, we see some issues and pormlems that can stem from that, but we are looking itno other consumer loans. INSTEAD, THE CALIFORNIA REINVESTMENT COALITION SAYS CREDIT UNION LOANS MIGHT BE A GOOD ALTERNATIVE. credit union INTEREST RATES RANGE FROM 30-50% STILL HIGH, BUT NOT AS HIGH A PAY DAY LOANS. THEY also SUGGESTED CONTACTING YOUR CREDITOR AND NEGOTIATING A PAYMENT PLAN. MORE OFTEN THAN NOT THEY’LL BE WILLING TO WORK SOMETHING OUT TO ENSURE THEY ULTIMATELY GET PAID. AND FOR EMERGENCY ASSISTANCE FOR THINGS LIKE HOUSING OR UTILITY PAYMENTS, SHE RECOMMENDS CALLING 211. THEY CAN HELP YOU FIND PROGRAMS THAT WILL ASSIST IN BRIDGing THE FINANCIAL GAP. BUT ULTIMATELY, THE CALIFORNIA REINVESTMENT COALITION URGES PREVENTIVE MEASURES LIKE CUTTING SPENDING AND ENROLLING IN LOW-INCOME FINANCIAL ASSISTANCE PROGRAMS TO AVOID GETTING INTO DEBT TO BEGIN WITH. JULIE, THANK YOU. COMING UP IN OUR NEXT HALF-HOUR: A CHILLING TWIST.. IN THE MURDER COMING UP IN OUR NEXT HALF-HOUR: A CHILLING TWIST.. IN THE MURDER OF A

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