Similarity – Ostelli Della Gioventu http://ostellidellagioventu.org/ Tue, 14 Sep 2021 07:33:54 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://ostellidellagioventu.org/wp-content/uploads/2021/05/cropped-icon-32x32.png Similarity – Ostelli Della Gioventu http://ostellidellagioventu.org/ 32 32 Debbie Wasserman Schultz Target Group with Payday Loan Bill TV Commercial https://ostellidellagioventu.org/debbie-wasserman-schultz-target-group-with-payday-loan-bill-tv-commercial/ https://ostellidellagioventu.org/debbie-wasserman-schultz-target-group-with-payday-loan-bill-tv-commercial/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://ostellidellagioventu.org/debbie-wasserman-schultz-target-group-with-payday-loan-bill-tv-commercial/

Liberal group spends $ 100,000 on TV ads in South Florida to denounce troubled Democratic National Committee chairperson Debbie Wasserman Schultz for not cracking down more harshly on what many call the predatory practices of the payday lending industry.

Allied Progress, in her 30-second commercial, uses the congressman’s recent appearance on a local Sunday public affairs show to criticize her for co-sponsoring a bill that would delay the Federal Consumer Financial Protection Council from regulate the business.

Payday lenders have long been the target of criticism from politicians and consumer advocates, who argue that the industry charges extremely high interest rates on customers, who are often the poor. The industry has argued that it provides a necessary financial service to people in need of emergency funds.

The ad features Wasserman Schultz saying that “payday loans are unfortunately… necessary” in an April 10 interview on “Facing South Florida with CBS-4 Jim DeFede. “

“No, congressman, it’s predatory,” said a voiceover. “Tell Debbie Wasserman Schultz to stop siding with payday lenders.”

“How could anyone qualify this racket as ‘necessary’ – unfortunate or not – is beyond me,” he said. Karl Frisch, executive director of Allied Progress, told The Associated Press while announcing the purchase of six-figure ads. The ad begins airing Tuesday for at least a week in the Miami TV market.

He also blames the congresswoman for raising more than $ 68,000 in campaign contributions from the payday loan industry, citing figures from the Center for Responsible Politics.

“(Borrowers) get trapped in a cycle of debt as payday lenders amass heaps of money, then turn around and donate to powerful politicians like Wasserman Schultz,” Frisch said.

Ryan Banfill, spokesperson for Wasserman Schultz’s campaign, said that “the ad, like all the others, intentionally takes it out of context.”

He said the congresswoman said that “payday loans are unfortunately a necessary part of enabling people to access the capital of the working poor” and that raising the minimum wage to $ 15 an hour would make unnecessary payday loans.

“This is a Super PAC masquerading as a group of consumers,” he said. “The group apparently decided they couldn’t win a debate without resorting to distortions and intimidation. It’s unfortunate for people who just want to pay their bills responsibly but are running out of money. “

He added that Wasserman Schultz “will continue to fight hard to protect consumers, as her constituents know she always has.”

The ad buy comes at a time when Wasserman Schultz faces a serious challenger in the Democratic primary for the seat of Florida’s 23rd Congressional District and has come under fire from Democratic presidential candidate Bernie Sanders.

Tim canova, a law professor at the university, raised over $ 1.5 million and got Sanders’ approval in his quest to defeat her. It has held the seat since 2005. The district is strongly Democratic, so the winner of the August 30 primary is almost guaranteed to win the November general election.

The Sanders campaign accused her of offering more favorable terms to favorite Hillary Clinton during the primaries, highlighting the amount and timing of debates and a dispute over access to party data.

Washington-based Allied Progress has been scathing criticism of her. Previously, she had produced a TV commercial and paid for a pair of billboards in the South Florida MP’s District, attacking her position on payday loans. He also started an online petition, DebtTrapDebbie.com, calling on him to “stop sabotaging the president ObamaIt is hard work to hold payday lenders accountable.

Wasserman Schultz is one of 24 co-sponsors of HR 4018, a bipartisan bill that would allow states, including Florida, to continue to regulate payday lenders instead of the federal government and delay federal rules by two. years. Half of Bill’s co-sponsors are from Florida.

In the CBS-4 interview, Wasserman Schultz said the controversy over the bill was “overblown”, adding that he was only saying “let’s press the pause button” to allow other states “that haven’t protection as good as us “to catch up in Florida.

Payday loans are often used to cover an unexpected expense or to make ends meet before the next paycheck. But for many borrowers, short-term loans prove difficult to repay, resulting in a cycle of debt that can last for months.

Such loans drain $ 4.1 billion in annual fees from consumers in 36 states where the loans are legal, according to a report released this month by the nonprofit Center For Responsible Lending. He revealed that borrowers pay $ 458 in fees on a typical $ 350 loan over two weeks. The interest rates in Florida for payday loans are on average 304%.

Republished with permission from The Associated Press.


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Debbie Wasserman Schultz attacked for bank donations and position on payday loan bill https://ostellidellagioventu.org/debbie-wasserman-schultz-attacked-for-bank-donations-and-position-on-payday-loan-bill/ https://ostellidellagioventu.org/debbie-wasserman-schultz-attacked-for-bank-donations-and-position-on-payday-loan-bill/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://ostellidellagioventu.org/debbie-wasserman-schultz-attacked-for-bank-donations-and-position-on-payday-loan-bill/

A law professor who runs against US Rep. Debbie Wasserman Schultz of South Florida says she’s in the pockets of the big banks and not looking for consumers who are crushed by payday loan debt.

“My opponent, after taking hundreds of thousands of dollars from Goldman Sachs and other Wall Street banks, voted to prevent the Consumer Financial Protection Bureau (CFTP) from regulating payday lending and fighting discrimination racialism in auto loans, “said Tim Canova on his website.

Canova, a first-time candidate and professor at Nova Southeastern University, challenges Wasserman Schultz in the August Democratic primary in a Broward / Miami-Dade district. The race gained national attention because Wasserman Schultz is the chairman of the Democratic National Committee.

Did Canova accurately describe its bank donations and votes related to payday loans and auto loans?

There is some truth in his attack, but each one needs explanation.

Donations from Wall Street Banks

Canova’s campaign highlighted donations from banks, securities / investment firms, and finance / credit companies to Wasserman Schultz’s campaign committee and his Political Action Committee, or PAC.

At the request of PolitiFact Florida, the Center for Responsive Politics compiled large individual donations (over $ 200) and donations to her PAC from her 2006 election. The center discovered that she had received $ 309,020. commercial banks, which represented about 2% of the total; $ 408,450 from securities / investment companies and $ 325,850 from finance / credit companies.

His PAC leadership, Democrats Win Seats, received donations from the Goldman Sachs PAC: $ 5,000 in 2016 and $ 10,000 in 2014.

Wasserman Schultz spokesman Sean Bartlett highlighted donations only to his campaign and extracted what he called donations from the “big bank.” This totaled $ 15,400, including $ 4,000 from Goldman Sachs.

But the Center for Responsive Politics has a longer list of bank donations even though we’re only looking at its campaign committee. This shows $ 171,303 for “commercial bank” industry donations.

Payday loan invoice

Payday loans are small, short-term loans that borrowers promise to repay on their next paycheck. high rate of interest. It is a controversial industry that targets the poor and is disproportionately located in minority communities.

For years, payday loans were not regulated by the federal government, although some states had their own laws.

President Barack Obama took a step towards regulating the industry when he signed a bill in 2010 that included the creation of the Consumer Financial Protection Bureau. Republicans have targeted the office for years.

Get some Democrats in the fray – including Wasserman Schultz, who got about $ 68,000 from payday lenders, according to the Center for Responsive Politics.

Wasserman Schultz is among Florida lawmakers who have defended Florida’s payroll law despite some consumer advocates criticizing it and saying it traps the poor in a cycle of debt. Wasserman Schultz’s position is to put state law first, his spokesperson said.

At the federal level, the office issued a payday loan rules overview in March 2015 and is expected to announce a more comprehensive proposal in the coming months. Congress does not have to approve him but can introduce legislation to kill him.

All but one of the Florida congressional delegation (Tom Rooney) signed a letter in April 2015, pushing back the proposed rules. Instead, they want the office to see Florida law as a model.

This led US Representative Dennis Ross, a Republican from Florida, to table the Consumer Protection and Choice Act, RH 4018 in November. Half of the 24 cosponsors are from Florida, including Wasserman Schultz, and nine of the cosponsors are Democrats.

Canova’s website said Wasserman Schultz “voted” on the bill, but was only referred to a committee without a vote. (After we reported this to Canova’s senior advisor, Richard Bell, the campaign changed the website to say “co-sponsored” instead of “voted”.)

The bill states that if the office determines that a state’s law meets federal requirements, only state law will apply. It would also delay federal regulations by two years, allowing states to come up with their own laws.

More than 200 consumer or civil rights groups – including the NAACP, La Raza National Council, the Southern Poverty Law Center, and the Consumer Federation of America – have written a letter in Congress urging them to defeat the bill. They argued that the bill promotes an “industry-backed Florida law” and would hurt consumers.

The Florida Payday Loan Act of 2001 was a compromise and included protections meant to help the poor avoid a never-ending cycle of debt. But the loans leave consumers stuck on a debt conveyor belt in Florida, where they have racked up $ 2.5 billion in fees since 2005, according to the Center for Responsible Lending’s March. report. Over the past year, the average Florida payday loan had an annual rate of 278%.

Richard Cordray, head of the Consumer Financial Protection Bureau, challenged Ross’ description of Florida law as “the gold standard” during a congressional hearing on March 16.

In Florida, “these loans are always made above 300%, and they are renewed on average nine times”, Cordray noted.

Bartlett argued that Wasserman Schultz fought against “abusive payday lending practices” and highlighted her vote on a separate bill in 2015. She voted against HR 766, the Financial Institution Customer Protection Act, which, according to opponents, would have prevented the Justice Department from going after the financial industry.

Racial discrimination in auto loans

Canova also said that Wasserman Schultz had blocked any action to end racial discrimination for car loans. This part of Canova’s attack concerns a Bulletin 2013 of the Consumer Financial Protection Bureau, which recommended measures for auto lenders to avoid discrimination. The purpose of the bulletin was to clarify the law in force.

But the House of Representatives pushed back against the office by passing a bill to cancel the ballot. The bill was passed by House 332-96 in November 2015 and did not receive a vote in the Senate. Wasserman Schultz was one of 88 Democrats who voted for him, while 96 Democrats opposed.

Promoters of the bill – including auto dealers – said the bureau’s efforts would increase costs for consumers. The groups that represented minorities wanted the new guidelines.

“This legislation has by no means prevented the CFPB from tackling racial discrimination in auto loans, and the MP does not support this as a political position,” her spokesperson said.

The bill has not been implemented and discrimination investigations can continue. A few months after the House vote, Toyota agreed to a $ 21.9 million settlement to black and Asian buyers.

Our decision

Canova said Wasserman Schultz “after taking hundreds of thousands of dollars from Goldman Sachs and other Wall Street banks, voted to prevent the Consumer Financial Protection Bureau from regulating payday lending and fighting discrimination racialism in auto loans “.

His campaign committee and the PAC have taken $ 309,020 from commercial banks since his re-election campaign in 2006, or about 2% of the total. This includes $ 15,000 in donations from Goldman Sachs to its leadership PAC.

The payday loan bill has yet to be voted on in the House, although Wasserman Schultz is one of the co-sponsors. The bill wouldn’t stop the bureau from fully regulating payday loans, but it would hand power over to states, including Florida, which has its own payroll law that some advocates have criticized as weak.

She voted for a bill that crushed office guidelines that sought to clarify the law on racial discrimination related to auto loans.

We rate this statement to be quite true.

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MoneyMutual to Settle Payday Loan in California for $ 2 Million https://ostellidellagioventu.org/moneymutual-to-settle-payday-loan-in-california-for-2-million/ https://ostellidellagioventu.org/moneymutual-to-settle-payday-loan-in-california-for-2-million/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://ostellidellagioventu.org/moneymutual-to-settle-payday-loan-in-california-for-2-million/

By Dean Seal (Jan. 27, 2020, 3:57 p.m. EST) – Payday lender MoneyMutual LLC has agreed not to pay more than $ 2 million to resolve nearly seven years of civil litigation over allegations he illegally promoted loans from unlicensed lenders in California borrowers.

The deal presented to a California federal judge for preliminary approval on Friday would pay $ 675,000 to a subcategory of Golden State borrowers who not only received loans from illegal lenders, but also repaid money to those lenders. lenders.

This subclass, estimated at around 17,000 members, is a far cry from the estimated 560,000 members of the certified class in February 2016, which included all Californians …

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CFPB Kraninger grilled on payday, military loan https://ostellidellagioventu.org/cfpb-kraninger-grilled-on-payday-military-loan/ https://ostellidellagioventu.org/cfpb-kraninger-grilled-on-payday-military-loan/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://ostellidellagioventu.org/cfpb-kraninger-grilled-on-payday-military-loan/

Lawmakers on Tuesday grilled Kathy Kraninger, director of the Consumer Financial Protection Bureau, over the agency’s decisions to overhaul the payday lending rule and stop screening financial firms for compliance with the law. military loans.

In his first appearance before the Senate Banking Committee since being sworn in three months ago, the bureau chief was also urged not to take action on student loan debt.

Although Kraninger made less waves during her short tenure than her predecessor, former CFPB Acting Director Mick Mulvaney, she continued to come under scrutiny from consumer groups and Democrats concerned about the future of the Republican-controlled agency.

During the hearing, Senator Elizabeth Warren, D-Mass., Criticized the sharp drop in enforcement measures since the GOP took control of the agency. Asked about the number of lawsuits the CFPB has brought against student lenders, Kraninger objected, saying she did not have “the specific answer to this question.”

“The public record appears to show zero,” Warren replied. “Not a single action.”

This compares to 50 cases filed against student loan companies, which led to the recovery of $ 712 million for consumers under former CFPB director Richard Cordray, a person named by Obama, Warren noted.

Warren raised similar concerns about the lack of discrimination lawsuits within the agency under Mulvaney and Kraninger, as well as a significantly reduced workload on credit and debt collection issues. She also raised broader concerns about Kraninger’s leadership in the office, saying she had failed to live up to her mission.

“You’re supposed to be the cop in the field, but you only watch out for crooks who cheat on American consumers,” Warren said. “If you had any decency, you would either do your job or quit.”

In addition, several senators sharply criticized Kraninger for the CFPB’s decision to suspend reviews of financial companies for their compliance with the Military Loans Act. Kraninger has yet to resume exams after replacing Mulvaney, who interrupted them. The Obama administration has conducted surveillance reviews for years and has long cited its authority not only under the Dodd-Frank Act, but also to regulate “unfair, deceptive or abusive acts or practices,” known as from UDAAP.

In January, Kraninger sided with Mulvaney and specifically called on Congress to give the CFPB “clear authority” to conduct surveillance reviews for MLA compliance.

Senators Catherine Cortez Masto, D-Nev., Jack Reed, DR.I., and Chris Van Hollen, D-Md., Each insisted on what had changed to require the withdrawal.

“You seem to place the onus on the military and their families to report violations before the agency acts,” Cortez Masto said. “The CFPB is required to enforce the LBA. “

Kraninger defended the decision, responding that “the MLA has not been designated by Congress as one of the listed statutes.”

Cortez Masto then noted that Kraninger had changed his mind based on a legal analysis, asking to see a copy.

Kraninger said she would not be able to hand deliver the document, citing “protection of the deliberative process.”

Reed, an Army veteran, raised additional concerns about the lack of MP exams, given that the law provides for a 36% interest rate cap for members of the military and their families.

“You chose to read the law to protect payday lenders,” Reed said. “What is so frustrating to me is that if it’s administration policy, you decide you shouldn’t be overseeing these companies. Supervision prevents the need for law enforcement.

Democrats also criticized Kraninger’s handling of the payday loan rule, including the decision to reconsider the repayment capacity requirement included in the final settlement. Van Hollen asked Kraninger if she knew how much the breakdown industry was saving from its proposal last month to waive the rule’s basic subscription requirement.

“I’m looking at your analysis,” he said, brandishing a sheet of paper. “Are you aware of the fact that you found out that the breakdown industry would save $ 7.3 billion to $ 7.7 billion?” “

“I understand where you are going with this,” Kraninger said. “There are a number of facts here; we are in active litigation on this matter.

Van Hollen replied, “The question is not whether we should take the reins of payday loans, which you are trying to do. The question is whether we should be protecting consumers. Isn’t it your job to protect people from predatory lending? “

Several other Democrats, including Sen. Bob Menendez, DN.J., and Senator Tina Smith, D-Minn., Have also lobbied Kraninger over the growing student loan crisis and how the agency can do more. to protect borrowers.

“There is deep frustration with loan management agencies,” Smith said. “It feels like all the power is with these big companies. I thought it was a good thing when the CFPB released a proposal [in February 2017] to get data and figure out what was going on. ”

However, “since then 1.5 million Americans have defaulted,” she added.

Kraninger said she “didn’t know about this until last week” and would get back to the senator.

Meanwhile, Republicans have adopted a more conciliatory tone with the CFPB director, asking for details on the timing of upcoming regulations, among others. Senator Mike Crapo, R-Idaho, asked her about the CFPB’s pending debt collection rules, while Senator Tim Scott, RS.C., asked if credit unions would benefit from regulatory relief additional.

Still, Kraninger responded without giving details of the agency’s direction.

“It is certainly a goal of the office to understand and reduce the regulatory burden,” she said in response to Scott. “But it’s also important to know how this affects consumers. “


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Morgan Lewis Principal on the Payday Loan Debate https://ostellidellagioventu.org/morgan-lewis-principal-on-the-payday-loan-debate/ https://ostellidellagioventu.org/morgan-lewis-principal-on-the-payday-loan-debate/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://ostellidellagioventu.org/morgan-lewis-principal-on-the-payday-loan-debate/

The Consumer Financial Protection Bureau (CFPB) said earlier in the month that it would seek to revise a number of payday lending regulations that were put in place in 2017 and were due to go into effect in August of this year.

Among the regulations scheduled for review is one known as “repayment capacity”, which would require short-term lenders to ensure that a borrower can repay low-cost short-term loans. amount before extending them to consumers. This would involve checking a borrower’s income, debt, and spending habits. Alternatively, the lender could choose to bypass this verification process and change the loan to an installment offer, with a deadline and payment schedule agreed upon at the time of loan granting.

As it was reported, the Bureau, recently renewed under Kathy kraninger, said the “repayment capacity” provision should be removed from the series of provisions expected to come into force this year. The agency said maintaining the requirement would negatively impact consumers’ access to credit and hurt competition in markets – and, the CFPB added, there is “insufficient evidence and legal support. For this provision.

Other provisions that are expected to come true (now in 2020) are still in place, including one that prohibits lenders from repeatedly attempting to withdraw payments from accounts after being declined only once.

A comment period remains in effect, and over the next few weeks all kinds of views are likely to be released.

In an interview with PYMNTS conducted during a written exchange, Nicholas Gess, director of Morgan Lewis Consulting, said the CFPBThe decision to rescind the “repayment capacity” provision is “hardly surprising” as the Trump administration made regulatory retreat a campaign issue in 2016. He added that “at a level More granularly, the CFPB has moved from examining the direct impact on consumers of the lending practice in question to a broader balancing effort in which consumer access to credit is also considered.

Gess, who serves as director of strategic litigation, risk avoidance and communications for Morgan Lewis Consulting, told PYMNTS that the rule, as drafted, would likely have increased the costs of granting claims. new loans and possibly “make them uneconomically viable”, while new proposals could look at loans through a “broader lens” which can in turn judge whether the loan products themselves are desirable.

With reference to the payday loan Landscape in general, Gess said the CFPB did not have the authority to ban the payday loan product, and “it just stopped and just made the product unsustainable.” As long as there is consumer demand for the product, there will be competition for it, and the top lenders may well be those with the capital and foresight to take advantage of new technologies. . It’s not much different from any other financial services product: innovation will be a competitive advantage.

But, as PYMNTS noted, the process from commentary to final rule-making hardly goes in a straight line, and Gess noted that there would likely be congressional oversight hearings, especially at the Chamber, as well as legal challenges.

“This may be an electoral problem, given that the proposal pushes the date back to November 20, 2020, just days after the next election of the president, the entire House of Representatives and a third of the Senate.” He added that as the debate becomes political, “it will be difficult to separate the proposals, which are broadly acceptable, as the underlying issue is a debate over whether payday loan should exist at all … politics will probably drown substance. I do not expect major stakeholders to agree on this issue.

Sloan to go it alone

Separately, the news arrived this week that the CEO of financial giant Wells Fargo, Timothy Sloan, could appear, alone, next month before the House Financial Services Committee.

The Wall Street Journal said the goal would be for the panel to “review” the bank’s recent abuse scandals. The appearance would take place on March 12, preceding an April hearing where Sloan would be joined by the CEOs of JPMorgan Chase, Goldman Sachs, Morgan Stanley, Citigroup and Bank of America.

——————————

NEW PYMNTS DATA: TODAY’S SELF-SERVICE PURCHASE JOURNEY – SEPTEMBER 2021

On: Eighty percent of consumers want to use non-traditional payment options like self-service, but only 35 percent were able to use them for their most recent purchases. Today’s Self-Service Shopping Journey, a PYMNTS and Toshiba Collaboration, analyzes more than 2,500 responses to find out how merchants can address availability and perception issues to meet demand for self-service kiosks.


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Northam seeks to change driver’s privilege card legislation, ban strip searches of children; approves reform of preferential voting and payday loans | Virginia https://ostellidellagioventu.org/northam-seeks-to-change-drivers-privilege-card-legislation-ban-strip-searches-of-children-approves-reform-of-preferential-voting-and-payday-loans-virginia/ https://ostellidellagioventu.org/northam-seeks-to-change-drivers-privilege-card-legislation-ban-strip-searches-of-children-approves-reform-of-preferential-voting-and-payday-loans-virginia/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://ostellidellagioventu.org/northam-seeks-to-change-drivers-privilege-card-legislation-ban-strip-searches-of-children-approves-reform-of-preferential-voting-and-payday-loans-virginia/

The move was celebrated by the Virginia Poverty Law Center and other consumer protection groups, which argued that predatory payday loans and car titles target the poor and trap them in financially precarious situations.

“We have been fighting for years to reform predatory lending, and it is a relief that we can finally end this legislative struggle,” Jay Speer, executive director of the Virginia Poverty Law Center, said in a statement.

Short-term lenders, meanwhile, told lawmakers throughout the 2020 regular legislative session that the proposed reforms could lead many of them to bankruptcy.

The legislation was presented by Del. Lamont Bagby, D-Henrico, and Senator Mamie Locke, D-Hampton.

“This legislation was essential before COVID-19 began to impact our communities. Now, even more Virginians can find themselves in financial difficulty and vulnerable to predatory lending practices, ”Bagby said in a statement.

Northam is to propose a change in legislation approved by the General Assembly banning strip searches of children, a practice that has come under public scrutiny after an 8-year-old girl was searched while she was visiting her father in Dillwyn correctional facility.

Northam’s amendment would add an exception to the policy, allowing minors who are under arrest to be strip searched if the officer reasonably believes they have a weapon.


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How Payday Lenders Take Advantage of Our Psychological Vulnerabilities Psychology https://ostellidellagioventu.org/how-payday-lenders-take-advantage-of-our-psychological-vulnerabilities-psychology/ https://ostellidellagioventu.org/how-payday-lenders-take-advantage-of-our-psychological-vulnerabilities-psychology/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://ostellidellagioventu.org/how-payday-lenders-take-advantage-of-our-psychological-vulnerabilities-psychology/

Lindsey Berry borrowed £ 10 from online money lender Wonga. Weeks later, interest charges, late payment fees and bank overdraft penalties inflated her debt, and she found herself owing £ 85 with no money to buy food.

Cases like Lindsey’s are on the rise in the wake of the financial crisis: Payday-related calls to National Debtline advisory service have increased 4,200% since 2007. But payday loan companies such as Wonga have cashed in, enjoying annual profits of £ 62.5 million as cash strapped consumers turn to short term loans with insanely high interest rates.

In July, the Archbishop of Canterbury made waves when he said the Church of England would seek to “compete [Wonga] the £ 2 billion a year payday loan industry is currently under investigation by the Competition Commission after the Office of Fair Trading discovered evidence of irresponsible lending practices. Wonga recently raised its standard interest rate to 5.853% APR – meaning if you took out a £ 10 loan you owed £ 585 in interest a year later.

Why would anyone sign up for such a crude deal? Psychological research can help explain how payday lenders have such a powerful – and toxic – allure. Payday lenders are taking advantage of people’s tendency to discount the future: Remote rewards are worth less than immediate rewards.

To give an example of how the discount works: £ 10 today may seem as good as £ 15 in a week, because the value of the future is £ 15 is reduced. People differ a lot in the extent to which they discount future rewards. John might prefer £ 10 today to £ 20 a week from now, while Bill might prefer £ 11 a week to £ 10 today. John is a steeper discount, which means he’s much more likely than Bill to take out a payday loan.

If John borrowed £ 10 from Wonga, he should £ 16.59 in a week – a godsend, given that £ 10 today is subjectively worth more to him than £ 20 in a week. When John takes out the loan, his decision is perfectly “rational” in the sense that it corresponds to his preferences. The problem arises later when the bill comes due: The £ 16.59 John now owes is no longer discounted, so the refund hurts – causing John to regret his earlier decision.

Neuroscience research suggests that exposure to stress can negatively impact people’s economic decision making. Recent studies have shown that the prefrontal cortex is essential for patiently awaiting future rewards; disturb the function of the prefrontal cortex with electrical stimulation makes people look to the future more strongly.

Unfortunately, the prefrontal cortex is very sensitive disruption due to chronic stress, and the latest evidence suggests that stress hormones and stressful experiences make people more discounted for the future. This means that the pressures of financial hardship can alter the prefrontal cortex, making consumers even more likely to decide to take out a short-term loan than they would otherwise under less stressful circumstances.

Visit the Wonga website and the first thing you will notice is that you can get up to £ 400 in just 5 minutes after your loan is approved. New search suggests that these kinds of ads work so well because poverty shrinks people’s attention. Urgent demands for an overdue utility bill or essential home repair can cause cash-strapped borrowers to focus on accessing quick and easy cash, neglecting fees and payments. interests that will come to them later.

In a series of recent studies, the subjects played a series of games. The “poor” subjects received fewer hits to win in each match, while the “rich” subjects received more hits. The researchers found that poor subjects focused more intensely on each shot and were more likely to take “loans” from additional plans – even if the loans depleted their savings for future games. As a result, poor subjects over-borrowed and earned less overall than rich subjects.

Surprisingly, all of these studies have been conducted on relatively well-off people, which means that any of us can make bad financial decisions when faced with financial insecurity.

Scientists are still working on the precise details of how poverty shapes economic decision-making, but the existing data is clear: Payday lenders target a population whose decision-making strategies are particularly vulnerable to exploitation. So how can we use this information to better protect consumers?

If stress causes borrowers to make deals they regret later, steps could be taken to prevent stressed clients from being exposed to tempting short-term loans. Recent work from our laboratory has shown that the most effective way to resist temptations is to avoid encountering them in the first place, as the will is often lacking. Regulations that make it more difficult for consumers to access expensive loans could function as a sort of collective “commitment device”.

Limit capacity for payday loan companies to advertise their services is a good first step; more robust approaches could include cap on borrowing costs Where prohibit companies from lending to those who cannot afford to repay.

If financial hardship narrows people’s attention to pressing cash flow issues and encourages them to overlook borrowing costs, policies that refocus attention on costs can help. The Fair Trade Office recently noted that payday lender advertisements tend to emphasize the speed and ease of access to loans, rather than interest rates – the same characteristics that make payday loans so dangerously attractive to people in financial difficulty.

At the very least, preventing payday lenders from displaying these characteristics in their advertisements, or forcing them to put more emphasis on borrowing costs, could in part mitigate the effects of poverty on borrowing decisions. . An even more effective approach would be to limit the tempting elements themselves, for example by impose a time limit before loan seekers can receive their money.

Archbishop Welby’s recent vow to offer competitive alternatives to companies like Wonga will fare much better if payday lenders are not allowed to advertise to sensitive populations and with an emphasis on the most attractive features of loans while hiding their costs. Lessons from psychology underscore the importance of smart regulation to prevent predatory businesses from targeting the most vulnerable parts of consumers’ brains.

National debt line (0808 808 4000; www.nationaldebtline.co.uk) offers free, confidential and independent advice on how to deal with debt issues


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As Federal Authorities Relax Payday Loan Regulations, Colorado Voters Oppose https://ostellidellagioventu.org/as-federal-authorities-relax-payday-loan-regulations-colorado-voters-oppose/ https://ostellidellagioventu.org/as-federal-authorities-relax-payday-loan-regulations-colorado-voters-oppose/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://ostellidellagioventu.org/as-federal-authorities-relax-payday-loan-regulations-colorado-voters-oppose/

To know the results of the most important electoral measures, Click here.

Colorado voters have massively opted for stricter payday loan regulations, easily approving a proposal to cap interest rates on short-term loans.

Colorado is now the 16th state, plus the District of Columbia, to limit lending rates. “The 200% APR is gone. Huge win for Colorado consumers! ” tweeted Danny Katz, director of the Colorado Public Interest Research Group, Tuesday night.

Meanwhile, the federal government has started to reverse historic payday loan regulations. The opposing trends are a sign that strong consumer protections are increasingly left to states.

Short-term loans, often referred to as payday loans because they are due on the borrower’s next payday, have average interest rates of 129% in Colorado. At the national level, the tariffs mean between 150% and more than 600% per year. Initiative 126, approved by a 3-to-1 margin, caps these rates at 36%.

The Colorado crackdown comes as the new leadership of the Consumer Financial Protection Bureau (CFPB), which was created in response to predatory lending practices that led to the subprime mortgage crisis in 2007, overhauled regulations on the lending sector. Earlier this year, acting CFPB director Mick Mulvaney, President Trump’s budget manager, threatened to review a recent rule regulate payday lenders and car titles. More recently, the office has taken steps to weaken the Military Lending Act, which protects military families from high-interest loans.

At the congressional level, two bills this year proposed exempting certain types of payday lenders from state interest rate caps. The legislation would have allowed high-interest loans to be transferred to lenders in other states, even though the latter state has an interest rate cap. Neither bill got out of committee, but opponents fear they will reappear in 2019. If passed, they say, federal legislation would render the consumer protections in place at the consumer level unnecessary. State.

“States have always played a vital role and have been a battleground for consumer protection issues around payday loans,” said Diane Standaert, senior legislative advisor at the Center for Responsible Lending (CRL ). “This is even truer today in light of the setbacks happening at the federal level.”

Before election day, the breakdown industry had argued that lowering rates would hurt lenders’ profit margins and lead them to drastically reduce loan issuance. This, in turn, would encourage consumers who need money fast in the hands of lenders and unregulated online services.

But this argument turned out generally false in the experience of other states with price caps.

Nationally, states have tightened regulations on short-term lenders since the early 2000s, when research began to emerge that lending could be predatory and keep borrowers in a cycle of debt. It’s not uncommon for a loan of $ 300, for example, to be renewed multiple times and ultimately cost more than $ 800 in principal and interest, according to CRL. Repeat borrowing is called churn rates, and accounts for about two-thirds of the $ 2.6 billion in fees lenders charge each year.

Colorado first attempted to regulate payday loans in 2010 by reducing the cost of loans and extending the time borrowers could take to pay them off. This has helped bring down the average annual interest rates on payday loans out there. Corn research by CRL discovered that some lenders were finding ways around Colorado’s restrictions.

To know the results of the most important electoral measures, Click here.




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Mission Hills payday lender James Carnes to appeal multimillion dollar fine https://ostellidellagioventu.org/mission-hills-payday-lender-james-carnes-to-appeal-multimillion-dollar-fine/ https://ostellidellagioventu.org/mission-hills-payday-lender-james-carnes-to-appeal-multimillion-dollar-fine/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://ostellidellagioventu.org/mission-hills-payday-lender-james-carnes-to-appeal-multimillion-dollar-fine/

The Consumer Financial Protection Bureau said Mission Hills payday lender James Carnes and his company provided <a class=payday loans that deceived consumers about the cost of their loans and continued to debit borrower accounts after canceling the loan. ‘authorisation.” title=”The Consumer Financial Protection Bureau said Mission Hills payday lender James Carnes and his company provided payday loans that deceived consumers about the cost of their loans and continued to debit borrower accounts after canceling the loan. ‘authorisation.” loading=”lazy”/>

The Consumer Financial Protection Bureau said Mission Hills payday lender James Carnes and his company provided payday loans that deceived consumers about the cost of their loans and continued to debit borrower accounts after canceling the loan. ‘authorisation.

The national law review

Lawyers for Mission Hills businessman James Carnes consider appealing judge recommendation that he and his company pay $ 38.1 million in restitution for a payday loan company that a federal agency said encouraged illegal lending.

On September 27, an administrative judge also recommended Carnes pay a civil fine of $ 5.4 million in connection with his company, Integrity Advance.

Justice Parlen McKenna’s ruling comes after the Consumer Financial Protection Bureau, an independent federal oversight agency, said Carnes and Integrity Advance extended payday loans that deceived consumers about the cost of their loans and continued to debit borrowers’ accounts after canceling the authorization.

Carnes’ notice of appeal characterized the outcome of the case as “arbitrary, capricious, abuse of discretion, not in accordance with the law and / or not supported by reliable, probative and substantial evidence” . Carnes’ attorney declined to comment on the appeal.

The consumer protection agency itself ran into problems Tuesday after a federal appeals court ruled the agency’s structure unconstitutional. A three-judge panel of the United States Court of Appeals for the District of Columbia in Washington, DC, ruled that the CFPB gave too much power to its director, without other branches of government controlling it.

“The office does not agree with the court’s decision,” CFPB spokeswoman Moira Vahey said in a statement.


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Payday loans: What they are, and why they’re so troublesome https://ostellidellagioventu.org/payday-loans-what-they-are-and-why-theyre-so-troublesome/ https://ostellidellagioventu.org/payday-loans-what-they-are-and-why-theyre-so-troublesome/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://ostellidellagioventu.org/david-chaston-reviews-the-actual-cost-of-credit-interest-plus-standard-fees-of-taking-out-a-payday-loan/ While life is full of ups, downs, most people will eventually find themselves in a financial bind. When this happens, you can easily become financially bankrupt. Many people fall for the temptation of a payday loan.

What is a payday lender?

A payday loan is a short term loan for $500 and less that is due by your next payday. They can also be called cash advance loans. The loan is a cash advance secured with the borrower’s personal cheque and was created for people who urgently need money. Payday loans can be advertised as an easy and quick solution to temporary cash flow issues. Payday loans are easy or quick for most borrowers via GAD website

How can I get a payday advance?

The borrower makes a personal check, payable to the lender, for the amount they are borrowing. The lender gives the borrower the amount of their loan less their fee. They also agree to keep the borrower’s postdated check until the loan becomes due. Usually, this is the borrower’s next payday. At that point, the lender will deposit the check into their lender accounts.

Who uses these loans?

Payday loans are available to anyone with a checking or savings account and steady income. It is possible to borrow from this lender even if you don’t have savings or credit cards. These loans do not require credit checks and are popular among people with bad credit ratings or no credit. The Consumer Financial Protection Bureau states that payday loan borrowers can become trapped in debt cycles and often get overwhelmed by the fees. These studies found that about 80 per cent of payday loans can be rolled over to a repeat loan, increasing fees for borrowers.

How much are these loans?

Here are the problems that can arise. The loan cost may be between $10 and $30 per $100 borrowed. A typical payday loan of two weeks with a $15 fee per $100 is almost 400% annually.

While payday loans may have been a viable option for people who need short-term cash, it is very costly. You don’t need to fall for these flashy ads. Instead, you can choose one of these options to help you get through difficult financial times.

Alternatives to payday loan:

  • Direct deposit is an option offered by your employer. You can also make automatic deposits to your savings account. This will allow you to have funds readily available for when you are really in need.
  • You can contact your creditors to ask for more time, or negotiate a payment schedule.
  • Hawaii State FCU members can access Money Management International (MMI), an anonymous and free credit counseling service. HSFCU members can also get budget and credit counseling as well credit report review. They also offer debt management plans for no charge.
  • Credit unions offer small personal loans. Credit unions transfer the savings from their non-profit status to their entire product range, offering customers higher rates for savings accounts and lower rates for loans and credit cards.
  • Cash advances from your credit cards are a great way to save money.
  • Ask for an advance from the employer.
  • You can use your credit union’s Overdraft Protection feature.
  • Ask a family member to lend you money.
  • Even payday loans may not be an option in extreme circumstances. Pawn shop loans may be better than payday loans. They are less expensive than payday loans. There is also an exit strategy for borrowers who can’t pay. The lender will keep the item and the borrower is free to walk away without any further obligations.
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