Payday lenders have less than 48 hours to share their opinions with the Consumer Finance Protection Bureau about its proposed reforms.
In a nutshell, the Bureau is calling for all U.S. payday lending merchants to ascertain – before any loan is granted – that a borrower has the means to repay the loan in an appropriate time frame without accumulating wild interest rates that otherwise results in a cycle of revolving debt.
This reform is advantageous for the consumer who, should it pass, will find it easier to make good on loans; and will deny loans to consumers who do not have the means to repay them.
Payday Lenders Have Until Friday, Oct. 7 to Voice Your Opinion
It is courteous of the Bureau to offer lenders and consumers a window for public comment – more than 189,000 responses have been recorded on its website. But it’s no secret that there are certain industries that the feds are eager to reform, and payday lending is one of them.
Forgive us that we’re pessimistic about the Bureau backing off its push for new regulations. We just feel this is the new climate we’re in, therefor lending agents – both storefront and online – are going to have to comply to stay in business.
An Opportunity for Payday Lenders
By no means is this the end of the payday loan industry.
It is well known that payday lenders charge high interest rates, that unscrupulous loan merchants exist and that the industry has a sketchy reputation. The Bureau’s proposal for new regulations is an opportunity for this industry to undergo a complete makeover, that payday lenders can work more closely with their clients to pay off debts.
Perhaps, with time, the Bureau’s reform could make the payday loan industry more attractive to consumers, rather than a last resort for those who live paycheck to paycheck.
Need Payment Processing for a Payday Lending Business?
Over the last five years, acquiring banks have become leery of offering merchant accounts for payday lending companies, partly because of the industry’s reputation. Therefore, it is a difficult industry for which to secure payment processing without a solid history of financials.
Our merchant account managers are always up for a conversation via live chat (below) or at 1-800-318-2713 to discuss your business.