Articles From Experts
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Express Newsline Articles From Experts |
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If you decide you must use a payday loan, borrow only as much as you can afford to pay with your next paycheck and still have enough to make it to the next payday. Ask your creditors for more time to pay your bills. Find out what they will charge for that service - as a late charge, an additional finance charge or a higher interest rate. Shop for the lowest cost credit available from cash advances on credit cards, small loans from a credit union or a small loan company. Consider asking your employer for an advance or turning to friends or family when an emergency arises. Put in writing a good faith agreement to pay them back by a certain date. Some community-based organizations may make small business loans to individuals. Ask for more time to pay utility bills. What can we as a society do? Consumer Federation of America offers major insight to answer this question in the following statement. "Failing an outright ban on cash advance loans, this type of loan should be explicitly regulated through state small loan laws requiring licensing or registration with state banking officials. Disclosures must comply with the federal Truth in Lending Act." There should be an absolute cap on effective annual interest rates. States should limit the size of these loans, set a minimum term that realistically permits the loan to be repaid, require written contracts, forbid multiple loans and roll-over of cash advances into new loans, and prohibit lenders from threatening borrowers with bad check laws if they fall behind on payments. Lenders should not be permitted to bring criminal prosecution for failure to pay cash advance loans on checks and these loans should be treated as unsecured debt for purposes of bankruptcy. States should collect industry-wide data to monitor the business. The federal government should close any loopholes that permit national banks to make payday loans in any state that prohibits state check cashers or state chartered financial institutions from making this type of loan. The Comptroller should require banks to comply with the consumer protections in the states where they do business. Pay advance systems are a lucrative business enterprise that capitalizes on those who are less fortunate either through innocent circumstance or through poor choices in life. Our economy inches closer and closer to a two class system, the "haves" and "have nots". More and more middle class folks are getting rich but too many are doing it at the expense of others. Its not hard to believe operations such as pay advance systems foster this concept. The tragedy is that when the swells of the poor increase sufficiently, the natural event is revolution, which is disturbing.
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