Targeted by Congress in its financial reform bill are payday loans. Payday lenders wonder why a financial reform bill made to stop the crimes of filthy rich Wall Street bankers goes after a financial service that helps ordinary people. The fact that pay day loans are part of the financial reform bill shows that the cash industry is looked on poorly by bankers, politicians, and a lot of overpaid people with cushy jobs who vote. All of the rest of us feel the same about payday loans. But if you’ve ever needed a pay day cash advance, for any good reason, you were probably glad you could get one.
When you need credit the most
Payday lenders provide a nice lifeline to those that nobody else will. Payday advances can get people out of financial jams and help them start building a good credit history. Greedy banks and wealthy speculators that triggered our most recent recession have made life very difficult for most Americans. It is even worse because it has become impossible for the average person to get credit. Even in better times, the more one needs credit, the harder it is to get. People who make plenty of money to live on and then some get invited to borrow money by banks every day.
Pay day loans under fire
What’s interesting about financial reform is that politicians don’t necessarily want to regulate the pay day lenders. They are actually going after the borrowers. Proposed federal regulation would limit consumers to six loans in a 12-month period. Another part wants lenders to offer extended repayment plans – they already do this with installment loans. The Salt Lake Tribune reports that a counter proposal has been submitted to exempt payday lending from federal oversight, so it’s unclear whether the six-loan limit measure will succeed.
Payday lending responsibly
Regulators at the Federal level would like to go after pay day lenders. But the industry promotes its own best practices with the Community Financial Services Association of America. CFSA member companies are required to comply with Industry Best Practices that ensure consumer protections and responsible payday lending to all customers. Another group committed to preserving affordable access to short term credit for millions of Americans is the Online Lenders Association. Make sure your money lender is a member of either CFSA or OLA before getting your payday loan.
Survival of debt responsibly
If you do your homework, pay day loans can be the difference in debt survival. You can make sure to have your bills paid before your next paycheck. If that seems like it is impossible, consider unsecured personal loans for debt survival. With an unsecured personal loan, you will be able to pay back your loan amount in monthly installments rather than with one paycheck. Make sure to take advantage of the OLA and CFSA. The CFSA will give tips on saving money, building credit, and making a budget. The OLA offers you a great step-by-step approach on how to use pay day loans the right way.
Sources
The Salt Lake Tribune
http://www.sltrib.com/D=g/ci_15072133
Community Financial Services Association of America
http://www.cfsa.net/index.html
how to use pay day loans the right way
http://www.onlinelendersalliance.org/resources.aspx
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