The payday loan industry has provided a quick and convenient way for Americans to meet their financial needs when life’s issues arise. However, over the years that convenience has come at a heavy price. According to a study by the Pew Research Center, the average payday loan customer spends an average of $520.00 in fees in order to borrow $375.00. These loans have an average annual percentage rate of around 390 percent. Payday loans are often the last resort for people who need money quickly and have no other way of getting it. Unfortunately, payday loan companies have taken advantage of that.

To combat these numbers and some of the tactics that the payday industry employs, the Consumer Financial Protection Bureau has proposed several new rules. The average payday loan borrower spends nearly half the year in debt. These changes are designed to make it easier for customers to get out of debt after they have received a payday loan.

Here’s what you need to know about the proposed rules changes:

1. CFPB is proposing a “full payment” rule: CFPB is proposing that all payday lenders be required to verify that a borrower can afford to repay their loan while paying for basic living expenses and other debt.
2. CFPB wants to put an end to “debt traps”: CFPB is proposing a rule that would limit the ability of payday lenders to grant the same loan or similar loans in consecutive months. It also puts restrictions on rolling over loans after they have been repaid or refinancing current loans.
3. Notifications when an account is being debited: CFPB proposed that payday lenders be required to give a notification to a customer at least three days prior to debiting their bank account. Many payday loan customers have payments automatically debited. This can be problematic if the customer doesn’t have the money to cover the payment as they typically incur fees from their bank and the payday loan lender.
4. Why can’t you get a payday loan from your bank? Experts speculate that larger banks are currently not doing payday loans because of a lack of regulatory standards in the industry. This leaves the industry to companies whose practices don’t typically favor customers.
5. How will CFPB determine if their proposals have merit: The proposals are open to public comment from now until September 14^th.

Contact the consumer rights attorneys at McIntyre Thanasides Bringgold Elliott Grimaldi & Guito, P.A. today. Their personal approach will help you achieve the results you need. Contact them today at 844-511-4800.

The financial industry is daunting for many people. While we understand the importance of investing, saving for retirement, or having an IRA or 401K, we often lack the knowledge needed to make proper decisions. While this may pre
vent us from making the best investments, it really harms us when we incur debt. As a matter of fact, we often incur debt because of a lack of understanding about how to deal with money and credit. This lack understanding is often taken advantage of by greedy financial services companies.

To educate consumers and to clean up the financial services industry, the federal government created the Consumer Financial Protection Bureau (CFPB) as a part of Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The CFPB is an independent government agency that creates and enforces policies that protect consumers of the financial services industry. They have regulatory power over a variety of financial services industry organization types, including banks, credit unions, debt collections, payday lenders and mortgage servicing companies, among others.

Since it began in 2011, the CFPB has conducted a number of initiatives to fulfill its mission of helping consumers make the best decisions in regards to the financial services industry. This includes:

• Creating a system for consumer complaints: If you are having an issue with a credit card company, a mortgage servicer or even a debt collector, you can log a complaint via CFPB’s system, both online and via phone.
• Research financial services providers: CFPB works similarly to the Better Business Bureau in that if you want to see if complaints have been logged against a financial services company, you can.
• Educating consumers on a variety of financial matters: The CFPB website has tools to help you determine the type of mortgage you should pursue, plan for retirement, assess risk in investments and navigate pension plans, to name a few. They have grown into an all-encompassing resource for questions about consumer finance.
• Enforce federal consumer financial law: CFPB is part personal finance educator, part finance industry police officer. Through their complaint database, they determine if monitoring, investigating, and if violations are found, the punishing of financial services entities should take place.

While CFPB serves a number of purposes that aim to help consumers, recent criticism has surface about CFPB’s seemingly limitless power and their inability to understand the long-term, potentially negative impact that their policies may have on the consumers that they are trying to protect. It has been said that their policies and rulings have led to higher checking and ATM fees and the reduced prevalence of prepaid credit cards and overseas money transmitters. These actions may be harmful to consumers who lack financial resources and rely on these services to be moderately affordable. Much has also been made of the lack of a true, independent appeal system. If you are found to be in violation of a CFPB policy, you can appeal to a judge that is selected by the CFPB director Richard Cordray. A lost appeal goes back to the CFPB director before going to federal court.

When you’re facing a financially difficult time, the natural response may be to pretend the problem doesn’t exist. That will only make matter worse. You owe it to yourself to talk to the bankruptcy attorneys at McIntyre Thanasides Bringgold Elliott Grimaldi & Guito, P.A. We will provide the thoughtful counsel necessary to help you get on track. Contact us today at 844-511-4800.