The federal agency responsible for monitoring the banking industry, The Consumer Financial Protection Bureau, is proposing new rules to protect the American public from some of the unscrupulous lending practices of the payday lenders. The Agency is trying to find the right balance between predatory lending and the free flow of credit for people in need of short-term loans. Different options according to the New York Times may require lenders to actually evaluate a borrower’s income and expenses for feasibility of repayment.
They may also require lenders to set limits on the amount that may be lent to a given individual. Other rules may put a cap on the actual interest rate charged, possibly 28%. In New York, the cap is 16%. All of these proposed measures are designed to regulate an industry where so many borrowers are caught in a vicious trap of rolling one loan into another with no way out, but bankruptcy.
Payday loans are now considered a major reason why people look to bankruptcy laws to provide relief from these exorbitant loans and the aggressive conduct of these creditors and their collection agents. If you are caught in one of these payday loan dilemmas and need a Bronx/Westchester bankruptcy attorney, call our office for a free telephone consultation.