The CFPB, a federal agency, has proposed new rules for payday, car title, and high-cost installment lenders.
BUT, they need to hear from consumers- that means you! We have an easy-to-use page where you can weigh in- it only takes a minute and will help bring about important consumer protections with these loans. Please share a line or two in the comments box about why you care about this issue and want to see strong federal reforms.
PS: You do NOT have to be a payday, car title, or installment borrower to sign the petition.
As the payday, car title, and installment loan industry is trying to fight the upcoming CFPB regulations, one of the claims they try to make is that store-front locations offering loans are far more legitimate and far less likely to take advantage of customers as compared to online lenders. We’ll agree that online lenders are also shady (read our post here: 8 Reasons Not to Get an Online Payday Loan)
Let’s examine this claim that storefront lenders are less shady. First, it’s impossible to ignore the predatory rates they charge their customers, and the fact that 4 out of 5 of their customers are forced to renew their loans because the loan repayment terms are unrealistic. These loans are allowed to be offered this way in many states because the industry has been so prolific at bribing…er…investing…er….making campaign contributions to state legislators who write the rules. And, the industry has a well-documented history of using questionable smear tactics to defeat state legislation that would better protect consumers.
Put aside their bad products that are legal but predatory, and let’s move onto the claim that all storefront payday lenders follow the rules. It turns out, that’s not the case either. In fact, some car title, and instalmment lenders also don’t follow state laws, and as a result, are forced to settle with regulators and with attorneys who sue them.
In our first edition of “Payday Lender Law Breakers,” we’ll take a look at Advance America and its checkered history of settlements.
There’s been a lot of them, so if we missed one, let us know in the comments section!
2015: State of Pennsylvania $22 million settlement: According to Lancaster Online, under this settlement, Advance America will pay $8 million in restitution, forgive unpaid balances of about $12 million, and pay another $2 million to the state for legal costs in administering the settlement. Read more here: Payday lender Advance America to return $8M to Pa. consumers in settlement
2010: Missouri: Advance America agrees to settlement worth at least $5.8 million in cash and debt forgiveness to a class of Missouri residents. Read more here: Payday Lender To Shell Out $6M In Class Settlement
2010: North Carolina: Advance American agrees to $18 million settlement in North Carolina: Read more here: Payday Loan Lawsuit Brings $18 Million Settlement Against Advance America
2010: South Carolina: Advance America part of $2.5 million lawsuit in South Carolina against payday lenders. Read more here: Payday Loan Class Action Settlement
2009 California: State of California Dept. of Business Oversight Settlement: In 2008 the Department conducted regulatory examinations of various Advance
America locations. The examinations cited purported violations of the CDDTL, including that Advance America allegedly collected excess amounts from customers that made partial payments on their loans, allegedly collected NSF fees on returned checks that were deposited after customers made partial payments on their loans, allegedly failed to refund finance charges to customers that paid off their loans the next business day following origination, and allegedly conducted deferred deposit transactions at an unlicensed location (hereinafter collectively “Exam Findings”). Advance America disputes and denies the Exam Findings. Read more here: State of California Settlement Agreement and Desist and Refrain Order
2009: Georgia Settlement: Press release: Advance America Announces Settlement in Georgia and the Closing of 24 Centers in New Hampshire
2009 Arkansas Settlement: Read more here: http://www.stoppaydaypredators…
CRC resources on predatory payday, car title, and installment lending
Share Your Story about payday, high cost installment, or car title lending- It only takes 3-5 minutes. By sharing your experience, you can help take a stand against predatory lending and help the CFPB understand why consumers need strong rules to limit predatory loans.
Editorials Against Payday Lending Newspapers around the country are weighing in! Check out this extensive compilation of 109 editorials (and counting!) against the debt traps created by payday and other high cost loans:
Payday Lender Hall of Shame: If you thought payday lenders are here to help, read this shocking expose of their worst practices. Some truly shocking behavior!
North American Title Loans Repossess Car from Injured Consumer. Watch this PBS NewsHour segment about TJ McLaughlin, whose car was repossessed after he couldn’t make payments because of a health problem.