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Payday lending itself isn't the problem. It's the usury that's the problem. Unfortunately, that was deregulated, so states are unable to enforce their own anti-
by s73ver_ 9y ago
Payday lending itself isn't the problem. It's the usury that's the problem. Unfortunately, that was deregulated, so states are unable to enforce their own anti-usury laws.
- JBlue42 9y agoI didn't know there had been regulations. It sounds like there might still be some in place but maybe they aren't adequate enough or as enforceable (or politically chosen not to enforce): https://en.wikipedia.org/wiki/Usury#United_States https://en.wikipedia.org/wiki/Usury#United_States In the following country analysis, I was surprised to see Canada set a limit of 60%/yr, which seems incredibly high. Japan seems to have a decent policy.
- s73ver_ 9y agoWell, as it says, there's no national law. However, the law followed is not the law where the borrower resides, but the law where the lender is headquartered. Which is why so many of the payday lenders are headquartered in New Jersey and South Dakota; those states were willing to gut their consumer protection laws in order to lure jobs.