Pawn Shops against Fast Cash Online Service Providers

Oct 24, 2017 by

Pawn Shops against Fast Cash Online Service Providers

The Consumer Financial Protection Bureau was an agency which received praise from around the country as it stood as a symbol of hope for the economy of United States of America. But it’s suspicious manner of functioning coupled with its unmindful rules and regulations has led to people distrusting the organization. One such instance where the Consumer Financial Protection Bureau has shocked the masses has been caused by the proposal of new rules and regulation on payday loaning. These strategically designed regulations are set to completely wipe out the majority of the payday lenders and providers of services like fast cash online and other such emergency cash provision services.

These new regulations are also set to control the practice of, ‘auto title lending’ or, ‘car title lending’ – a financial advance of a small sum of money given for a short duration of time which requires the borrower to give the moneylender the title of his or her automobile. Consumer Financial Protection Bureau’s new rules are also expected to possibly even crumple low scale and low cash advancing by banks and credit associations. But the new set of CFPB’s regulations will not rattle the pawn brokers. Consumer Financial Protection Bureau explicitly left out pawn shops from their guidelines because they think of them as an improved option over payday loaning for people in a desperate need for cash.

Payday moneylenders are feeling cornered and victims of partiality. The special protection given to pawn shops by the Consumer Financial Protection Bureau looks highly discriminatory to legally registered payday lenders. In the future, exactly what and how pawn shops will benefit from these changes in the system is a matter of guesswork, but some criticizers of payday advances are certain that people in a desperate need for cash will be well treated by putting their trust in pawn shops over payday creditors. The agency’s reason is that pawn shops do not source the difficulties that inspired them to levy the new rules on payday loaning.

The guidelines were supposed to put an end to the vicious, ‘debt traps’. A vicious cycle where debtors take out credits with exceedingly high rates of interest to evade a temporary emergency, and then they start falling profoundly into further debt and liability in trying to pay back the amount of loan which keeps increasing. The statistics and numbers provided by the agency showed that ‘debt traps’ are very common and are happening all over the country. Nine out of ten payday advances are rolled over or trailed by one more advance in two weeks. Almost fifty percent of payday advances are part of an order where the debtor is seen eventually taking over 10 loans. With rates of interest reaching over 300%, those charges usually find themselves to be greater than the original amount of loan that was taken. This is the major reason behind the agency demonizing the payday lenders.

The Pawning industry, however, does not present similar types of danger to its customers. The debtor is never at risk of dwindling into a sequence of debt. If anyone is unable to recompense the credit, the broker merely keeps a hold of the pawned piece and the deal is concluded then and there.

In its projected regulation, the agency gave out two other motives behind classifying pawning as an industry superior to payday lending. The motives were psychological and practical. Firstly, people are more likely to fear to lose a physical item over calculating the long term ill-effects of loaning at high rates for fast cash online. Secondly, the pawned article that the dealer takes is not as much likely to upset the debtor’s capability to toil and harm him financially.

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Payday Advance – a Thing of the Past Now That The CFPB Is Gone!

Sep 12, 2017 by

Payday Advance – a Thing of the Past Now That The CFPB Is Gone!

Encouraging no hassle, a federal court had condensed the United State of America’s most influential and self-regulating supervisory agency to one of the most ardent receivers of political notions. The agency which was at the root of increasing financial malpractices like the upsurge in both availability and acquisition of payday advance and other such financial loopholes that the average man was forced to get into.

The U.S. Court of Appeals which falls under District of Columbia adjudged that the Consumer Financial Protection Bureau, shaped as a portion of the 2010 Dodd-Frank financial modification struggle, did not obey a Constitution based on checks and balances. In simpler terms, the leader of the CFPB had excessive control and the agency had lavish levels of freedom from any supervision which was frankly un-American at its core.

The rather newly formed agency saw a lot of heads turn, especially the common folk who needed economic reform but the structure of the agency was deemed undemocratic and quite rightly so. The organization had been intended to unify the supervision of consumer economic foods such as loans, credit cards. These amenities had previously been spread among numerous agencies, of whom all failed. The CFPB’s readiness to charge fines and recover reimbursement for consumers in several types of financial swindles had initially made it a champion for consumer supporters and a worry for fiscal lobbyists and the politicians, chiefly Republican, who supported them.

The judgment, in a case that upturned a $109 million imposition charged by the CFPB against loan and mortgage creditor PHH, arose, incongruously, just as the agency had achieved one of its major successes. The chief executive of Wells Fargo, John Stumpf had resigned following fines by CFPB and other controllers. To sort out the discoveries that the financial organization might’ve deceitfully opened new financial records for consumers in order to achieve sales targets.

The court ruling was an impediment for Senator Elizabeth Warren, who has been accredited for incepting the idea of an agency like the CFPB. She was also likely to have become its first director. She discharged the court ruling on as a minor and insignificant, “tweak” on the hypothesis that the agency would ensure occupying its role as it has before by directors chosen by Democratic presidents. That hypothesis might have been too superficial.

In the court ruling, the pleas panel constituting of three members settled 2-1 that the agency’s edifice dishonored the Constitution’s, “separation of powers” facility due to the fact that the agency wasn’t adequately answerable shockingly, either to the president of the country or even to the Congress. The system also lacked the built-in checks and balances of the dual-party commissions followed by other prominent independent agencies. For example, the SEC, has five administrators, two chosen from each party and a chairperson habitually allied to the party occupying the White House. Other major agencies, too, have similar structures. The CFPB instead has a lone leader with extensive. The director can be fired only by the president that too after presenting a viable cause. That director is established by the Senate or else Congress has diminutive influence in the agency’s business. Even the money is not handled by Congress but comes directly from the Federal Reserve. The CFPB being technically a unit of the Federal Reserve allows a little or no control over the banks.

The Consumer Financial Protection Bureau was never meant to live up to what the people thought it would achieve. Its complexity proved to be a burden on businesses forcing the reduction of jobs and increase of activities like payday advance which harm the masses in a highly negative manner. The current government knows about this and is acting strongly to fix this. That might be a glimmer of hope for our economy.

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Are Payday Lenders who we really think they are?

Jun 20, 2017 by

Are Payday Lenders who we really think they are?

Though we have more information readily available to us now that the Internet is so readily available, people still base their opinions upon what they hear people say. And it is often the loudest voices (websites with the most visitors) that tend to get listened to the most. This is not a good thing, as the world has grown more and more polarized despite most of us having instant access to all the facts that are available to us. People would often rather just go along with the popular opinion than make informed decisions for themselves.

This state of affairs leads us to a world where perception really has become reality for most. If the websites and people we tend to gravitate toward say something on a topic, many people simply mentally check out and take that opinion on as their own. A topic that really shows this idea in action is payday loans. The mainstream media has pretty much demonized the lenders that make up this industry, while making the people who use these loans out to be folks who simply don’t know how to make better choices for themselves. Heck, if you believed what gets put into print most of the time, you’d think that every payday lender was a millionaire Ebenezer Scrooge type of character; someone who is raking in tons of profits off of the misery of others.

So, what kind of money are payday lenders raking in regularly? Are they really the heartless, rich money changers that so many people would like you to believe? In a word – “No!” It turns out that many payday lenders are not nearly as wealthy as the CFPB and other organizations would like you to believe. Studies have been done across the industry to find out what the average lender brings in every year. The higher per-loan and store overhead costs can make it extremely difficult for lending companies, especially smaller companies to remain profitable.

It is important to remember that payday lenders are in the business of providing unsecured (no collateral) loans to some of the highest risk borrowers (people with low credit scores and/or lower than normal income levels.) These folks make up a large portion of the country, but are dramatically unserved/underserved by the mainstream banks and other creditors. In other words, in many ways payday lenders have a corner on a market. Yet, most lenders continue to charge fees that are very similar across the board. That is to say, that payday lenders (for the most part) are not driving up the costs associated with their loans, even though that would be pretty easy for them to do, as the majority of their client-base has no other source to turn to for small dollar/short term lines of credit.

The long and short of this whole situation is that payday lending companies (especially the smaller to medium sized ones) are like other small businesses in this country. Most of them care about the people and communities they serve. Most of them are not on a mission to gouge their clients, even though they could easily do so. The majority of payday lenders are working hard to remain even minimally profitable, and like the fact that they are able to provide valuable services to the communities that they work in.

Think about that the next time you read an article that talks about wealthy, predatory lenders who have no regard for the people they loan money to. This description might work as great click-bait and undoubtedly outrages people. But it simply does not paint an accurate picture of 99 percent of all payday lending companies doing business today.

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CFPB Accuses Online Payday Lenders of Exposing Customers to Hidden Risks

Jun 6, 2016 by

CFPB Accuses Online Payday Lenders of Exposing Customers to Hidden Risks

Dealing with emergency expenses is difficult for even the most affluent among us. Lower income households, however, can fact outright ruin when financial emergencies rear their ugly heads. And many low to mid income households in this country are either underbanked or unbanked, so they often have very few options when they need to borrow money to take care of these types of expenses. Often, these folks turn to alternative financial service providers, like online payday lending companies.

More often than not, people who take out payday loans run into no problems with repaying them, and they are then free to go about their normal routines. In some cases, though, people get hit with fees that they may not have expected. Some reports have shown that borrowers pay an average of $185 in penalties from their banks – usually overdraft or non-sufficient fund fees – when lenders go through the process of automatically deducting repayment for loans given. It is estimated that about a third of online borrowers who winded up with bank penalties had to deal with involuntary bank account closures.

This has happened to consumers when online lending companies repeatedly make debit attempts on their customers’ accounts. This causes extra bank fees to kick in for the account holders, even though these efforts usually lead to no payment being recovered on the part of the lending companies.

Of course, the CFPB is keeping tabs on online payday lending companies, so it comes as no surprise that the Director of the CFPB, Richard Cordray has a strong opinion on these types of issues. Cordray said, “Each of these additional consequences of an online loan can be significant, and together they may impose large costs, both tangible and intangible, that go far beyond the amounts paid solely to the original lender,” said CFPB Director Richard Cordray.

These findings come with the third analysis that the CFPB has done on the United States payday lending industry. Payday lenders provide unsecured loans to their customers, and typically the person who borrowers from one of these lending companies pays the lender back within a few weeks. It used to be that most payday lenders got paid back via a post-dated check. These days, though, online payday lenders usually automatically deduct the loan amount plus fees when the loan has run its term. The Obama administration has always had a disdain for this industry, and has supported the CFPB in its efforts to cook up new regulations that could potentially drive a lot of smaller lending companies out of business.

The CFPB analyzed about a year and a half’s worth of data from Automated Clearing House. This is the financial network used to put money into a borrower’s account and also to extract payment when the loan payment comes due. The data analyzed showed that some borrowers did not have adequate funds in their accounts when the loan repayment request happened, and that this – as one might expect – resulted in people getting hit with overdraft charges from their banks.

Here’s the thing, though – these fees are not charged by payday lending companies; it is the traditional banks that love to profit from imposing these fees. It is not the fault of a lender if a borrower does not live up to their end of the agreement by having adequate funds to cover the transaction in their bank accounts. No matter how much Cordray and his team want to twist these types of situations into being the fault of online payday lenders, the bottom line is that the fees are charged by the banks and happen because consumers fail to keep enough money in the bank to cover loan payments that they knowingly agreed to. End of story.

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Can Your Credit Score Influence the Upcoming Presidential Vote?

Apr 25, 2016 by

Can Your Credit Score Influence the Upcoming Presidential Vote?

You probably already know that credit scores can affect the kinds of loans you get, insurance rates and even the kinds of jobs you are eligible to fill. But is it possible that voters’ credit scores can have an impact on the upcoming presidential election?

People are angry – and have been angry – for having been kept out in the cold during this country’s slow financial recovery. And nationwide economics always figure into election season. Strange that as Obama is finally on his way out that the hope he promised to millions of America is still nowhere to be seen. The bottom line is that even though the economy may be in better shape than it was when the current POTUS took office, there are still millions of people who suffer from serious financial problems. Low credit scores around the nation are indicative of this very fact.

A recent survey indicated that a substantial percentage of voters with bad credit are throwing their support behind Donald Trump as their choice for the next President of the United States. This survey involved over 700 potential voters. The final numbers were crunched and it turned out that about 20 percent of the Donald’s supporters indicated that they had bad credit scores. By way of comparison, those who said that they support John Kasich and who had bad credit came in at only about half of that percentage. The number of Trump supporters with bad credit was also quite a bit higher than those who support Ted Cruz.

Don’t let this portion of the survey results fool you, though. The study also reveals that people with great credit scores also support Trump. About 50 percent of those who said they will likely vote for Trump had credit scores higher than 720. This is an important demographic, as higher credit scores usually equate to more wealth and an older pool of voters.

So, how do things look on the other side of the fence? It turns out that the credit scores of supporters for both Bernie Sanders and Hillary Clinton were very similar in this study. The biggest difference was those with bad credit. About 26 percent of Clinton supporters reported that they had bad credit scores.

According to Gregory Wawro, a Columbia University political science professor, “This data is consistent with the argument that Trump is drawing … support from individuals who feel financially insecure, and … are supporting him because they feel like they have been economically marginalized.”

It is still too early to know how things will shake out with the current pool of potential presidential candidates. Regardless of the final two players standing in this race, though, the fact of the matter is that the American people – both those with low credit scores and those with higher credit scores – are certainly ready for a change. The economy, while improving, has yet to reach a place where wages have started to increase substantially across the market. And there are still plenty of people who are unemployed or underemployed.

It is clear that credit scores do impact the way that people think about politics and politicians. If the final two candidates in this race were to be picked by people with lower credit scores, it appears that it would be a battle between Trump and Clinton. With many experts already believing this is how the race will ultimately prevail, then the people with lower credit scores may very well have a chance to make a real impact on the upcoming presidential race.

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