JACKSONVILLE, Fla., April 8 -- A House Financial Institutions and Consumer Credit Subcommittee hearing held April 2, 2009 for H.R. 1214, the Payday Loan Reform Act, included testimony about the effectiveness of state payday lending regulation. The testimony emphasized that some states have chosen to strictly regulate short term lending, while other states have simply attempted to ban payday loans by implementing limits on fees based on an annual percentage rate.

"Several states, including Florida and Oklahoma, are effectively protecting consumers," said Thomas Reinheimer, CEO of Veritec Solutions of Jacksonville, Florida. "Veritec is at the forefront of implementing effective regulatory ... Continue Reading

New Study Finds 4,547% Interest Rates on Bounce Protection Loans

WASHINGTON, DC – The median interest rate on bounce protection loans is in excess of twenty times that of payday loans concludes a study by Mark A. Fusaro, Department of Economics, East Carolina University.  
 
The independent study, “Hidden Consumer Loans: An Analysis of Implicit Interest Rates on Bounced Checks,” finds that “Payday lending attracts attention for its high interest rates, but bounce protection loans are much more expensive. When the amount borrowed is low and the time outstanding is short, the effective interest rate paid on this loan can ... Continue Reading

Urban Institude report recommends better disclosures and increased competition to protect consumers

WASHINGTON--A new report by the Urban Institute finds that if payday advances are eliminated they “could be replaced by alternatives that make
families even worse off.”

In “Enabling Families to Weather Emergencies and Develop the Role of Assets,” by Signe-Mary McKernan and Caroline Ratcliffe, the researchers find that low-income working families need access to small loans, such as payday advances, to help weather bad patches. 

Instead of regulating prices charged on small, short-term loans, the authors argue that increasing competition will drive prices down. They express concern that ... Continue Reading