SHOULD THE GOVERNMENT PROTECT CONSUMERS OR SHOULD THEY KNOW BETTER?Most payday lending companies in Arkansas say they will close or stop issuing high-interest loans to avoid being sued for violating the state constitution, Attorney General Dustin McDaniel said Tuesday. McDaniel said his office received word from 52 companies that they will comply with a cease-and-desist letter he sent them last month. McDaniel said he believes another seven companies have stopped issuing high-interest payday loans. The 59 companies account for almost all the 156 payday lending locations targeted by McDaniel. On March 18, the attorney general sent the companies a letter stating they would face the likelihood of lawsuits if they didn't shut down immediately and forgive customers' debts. McDaniel based his actions on two recent state Supreme Court rulings he said make clear that the high interest rates violate the state constitution and the Arkansas Deceptive Trade Practices Act.
TAKE A LOOK AT THE COST OF A PAY DAY LOAN:
Through a typical payday loan in Arkansas, someone writing a check for $400 would receive about $350. The lender would keep the check for about two weeks without cashing it, giving the customer time to buy back the check.
The $50 charge on the $350 loan for 14 days equates to an annual interest rate of 371 percent, well above Arkansas' 17 percent limit.
Yeah I hope that simmiliar laws are passed in Texas but of course the payday loan lobbying is so strong and in bed with our lawmakers that it will not ever make it to a vote.
ReplyDeleteVery few people ever pay these loans back in full but instead keep paying the interest until a $300.00 loan becomes $800.00
I personally would challenge and lawmaker in this state to see if they could over come their addiction to the payday loan lobby money and outlaw them but they are too gutless to even try.
My EX-wife got hooked on prescription meds and resorted to this crap w/out my knowledge. She racked up $20k debt before it was discovered. My crazt ex was paying 550% interest. They are legalized loan sharks. I'm for the legislation to rid these dirt bags but as the previous writer claims the legislator's are too in rooted in their lobby money.
ReplyDeleteThis is a BIG problem in Alabama as well. Many want the legislature to shut them down BUT legislators own interests in many of the pay-day loan companies that are raping a foolish public there so that will never happen.
ReplyDeleteHas any one looked to see who owns these Texas legal loan-shark outfits?
The deal about payday loans is simple...If you have the money to pay back the loan, then you must have the money you want to borrow!! These companies are in business because of a persons misery. This was a hard lesson I had to learn when I repaid a payday loan back some 420%. I learned very quickly. I will never be a victim of this insane lending practice again. One thing that I did was when I got paid, I borrowed money from myself, I know that sounds weird, but it actually works. Take an amount, give it to someone you trust and when you need it, borrow some of it, not all of it. And with a little determination, you may end up saving a little in the process. Most people borrow money for some past due bill that creditors are hounding them for. Well, negotiating works just as well as cash in most cases, and keeps you from borrowing against your own paycheck. Pay the late payment fees and talk to your creditors to keep your account in good standing. Trust me, you'll save big in the long term!!
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