Payday Loans

Many payday lenders could go out of business if rules made final this week by the Consumer Financial Protection Bureau go into effect. But the changes face stiff headwinds from Republicans in Congress.

One new rule would require payday and auto title lenders to determine whether a borrower can afford to repay in full within 30 days. That could thwart a business model that consumer advocates say relies on the rollover of unpaid loans with the accumulation of exorbitant fees and interest rates of 300 percent or more.

Kentucky Bill Seeks to Limit Payday Loan Interest

Sep 22, 2014
Moritz Wickendorf, Wikimedia Commons

A state lawmaker from Lexington is proposing legislation to cap interest rates on so-called “payday loans” in Kentucky.


From NPR: It's come to this for Rep. Todd Akin of Missouri:

As more and more of his fellow Republicans call on him to drop out of his race for the Senate before today's 6 p.m. ET deadline to easily get his name off the ballot, the congressman's loudest defender is his Democratic opponent. 

Illinois Governor Signs Payday Lender Law

Aug 21, 2012

Illinois Gov. Pat Quinn has signed a new law he says will protect consumers from payday lenders.  Quinn signed the law Monday.  It requires lenders be licensed by the state Department of Financial and Professional Regulation or be charged with a felony. Right now the agency has licensed 522 payday lenders.  The new law also protects consumers who are trapped in high-interest loans from having to pay back the debts, allowing such loans to be declared null and void.