This is long overdue, predatory lending has been mercilessly preying on the working poor and other financial desperates the past few years. New regulation out of the US Financial Protection Bureau is one of many critical curtailments needed on socially destructive credit-sellers.
The $46 billion payday lending industry is about to suffer a big blow. The Consumer Financial Protection Bureau’s release of new payday lending regulations is imminent. The new rules could crack down on high-fee short-term installment loans, like the kind doled out by car-title and payday lenders, according to the New York Times.
Here is a direct link to a video report.
Also see: Investment riches built on subprime auto loans to the poor. Clearly all those ‘record’ car sales over the past couple of years, are not the financial ‘good news’ the bulls would have us believe.
On a related note, a friend was complaining to me this week, that she had accompanied her 20 something daughter to the bank recently for a mortgage application. Her daughter and spouse are recently graduated and employed in new careers. They had done a financial review and self-determined that they could afford a $300,000 home given their down-payment and debt tolerance. When they reviewed the same numbers with the woman at the bank who was titled “Financial Advisor”, the bank employee asked why they were setting their bar so low: “You qualify for a million dollar home,” she gushed to the newly weds, “why wouldn’t you look for one of those?”
My friend said she was revolted by the mindless drivel coming out of the debt-seller’s mouth, as they sat surrounded by glossy marketing materials on ‘peace of mind’ and the ‘trustworthy’ nature of the bank and its employees. Moreover, she was alarmed to think of all the people who do not know better, and have been acting on such so called ‘advice’ from the financial sales crowd the past few years.
Then I reminded her, that even individuals who have made sober personal choices to date, now stand part of the collective taxpayers, who have been pledged to underwrite 100’s of billions of these federally insured housing (and student) loans sold by banks. We will continue to pay, and banks will continue to harm us all, unless and until we reign in the runaway finance sector.
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