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Trump takes action to make 400% APR Payday Loans more available

Discussion in 'Too Hot for Swamp Gas' started by WarDamnGator, Feb 6, 2019.

  1. WarDamnGator

    WarDamnGator GC Hall of Fame

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    Thanks Trump, just what we needed. Obama tried to limit their use, so it must be bad ... because, you know ... Obama.

    The Obama-era rules were already starting to work, Horowitz says: "Lenders were making changes even before it formally took effect, safer credit was already starting to flow, and harmful practices were beginning to fade." So there was no real reason or need, he says, for the shift.

    These loans can be extremely risky because they're expensive: The national average annual percentage rate (APR) for a payday loan is almost 400 percent. That's over 20 times the average credit card interest rate.

    And often, borrowers can't pay back the loan right away. The Consumer Financial Protection Bureau found that nearly 1 in 4 payday loans are re-borrowed nine times or more, while Pew found it generally takes borrowers roughly five months to pay off the loans — and costs them an average of $520 in finance charges. That's on top of the amount of the original loan.

    "Payday lenders have a predatory business model where they profit while families are plunged into an unaffordable debt trap of loans at rates that reach 400 percent APR or higher," says Lauren Saunders, associate director of the National Consumer Law Center.


    Trump administration rolls back payday loan protections, which may affect millions of young people
     
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  2. docspor

    docspor GC Hall of Fame

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    They aren’t mandatory

    Devo was right

     
  3. WarDamnGator

    WarDamnGator GC Hall of Fame

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    Shooting heroine isn't mandatory, either.
     
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  4. BLING

    BLING GC Hall of Fame

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    So MAGA is basically all about letting the lobbyists and shady operators run things. Basically a lying con-man's paradise. Who could have guessed?
     
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  5. gatorknights

    gatorknights GC Hall of Fame

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    Speaking of lying con-man's paradise...

    Fannie & Freddie are raising the price limits so lenders can obtain "appraisal waivers" on their mortgage loans. Loan officers know exactly how to game that system and they do it big time. Meaning, the risk factor involved on those loans with the AW's on them is substantially misstated. Happened when the Savings & Loans industry (anyone remember those) went belly up, happened again in the mortgage fraudfest that triggered the worst recession since the great depression. Now this. "Those over burdensome regulations to protect the public from theft and fraud are obviously not necessary, because we have to close more loans."

     
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  6. fredsanford

    fredsanford Premium Member

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    Birds of a feather.
     
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  7. citygator

    citygator Premium Member

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    Very well said. The swamp has never been so full. This will rival any administration’s fleecing of America when the ink is dry in the books.
     
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  8. wgbgator

    wgbgator Extremely Online Premium Member

    Legal loan sharking is just how you make America Great
     
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  9. fredsanford

    fredsanford Premium Member

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  10. gatorknights

    gatorknights GC Hall of Fame

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    Trump administration will roll back Obama-era restrictions on payday lenders

    "Critics of the new policy around said this fulfilled their fears that the Trump administration was working to undo consumer protections and would put financially vulnerable Americans at risk.

    “Kathy Kraninger is siding with the payday loan sharks instead of the American people,” said Rebecca Borné, senior policy counsel at the Center for Responsible Lending. “The CFPB, under a previous director, spent five years developing these consumer safeguards, taking input from lenders, faith leaders, veteran and military organizations, civil rights groups, consumer advocates, and consumers from across the country.”

    What a wonderful effect of dismantling those "over-burdensome regulations" that get in the way of loan sharks ERRR financial services companies financially sodomizing ERRRR helping our fellow citizens. ;):mad:
     
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  11. danmann65

    danmann65 GC Hall of Fame

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    I personally think people should read and understand what they are getting. So I am opposed to small print. However desperate people make bad decisions. A bad decision should destroy their life for years. I would think 400 percent apr for a week or two and then convert it to something more reasonable like 20 percent apr. This would be doable.
     
  12. WarDamnGator

    WarDamnGator GC Hall of Fame

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    If they had 20% short term loans available to them why would they not go there first?

    We have laws in most states called usury laws, that prohibit high interest rates. Enforcement of those laws have been gutted by credit card lobbyist, who can now charge up to 30% APR, now we have payday lenders charging up to 400% APR. The OP said the average payday lender borrower gets $500, and ends up paying back $1020 after interest and fees, over 5 months...

    These are likely the worst off Americans, people who don't have $500 in emergency cash, and are getting abused...
     
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  13. wgbgator

    wgbgator Extremely Online Premium Member

    Borrowing money from an advance on your income to pay your bills when you don't have any money isn't a bad decision though. Its definitely a better decision than having your utilities cut off or being evicted because you cant make rent. This type of loan sharking takes advantage of that reality.
     
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  14. Rocinante

    Rocinante Junior

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    This is very Christian of him. How do evangelicals justify their support? It’s beyond my comprehension. It’s always been my position that if you tout certain values, moral positions and behavior, especially ones that are part of “Who you are”, you demand adherence to them from anyone in your sphere of influence. I have lost jobs and customers over my insistence on certain ethical positions, if you can’t risk loss in support of your beliefs your beliefs aren’t very strong. So I don’t believe the “so called” Christians that support Trump are very serious about their beliefs.

    This practice is worthy of a little time on the “Rack”. It’s disgusting, immoral and un-American in my view.

    One solution, since real banks don’t want to do it, is to enable the post office to offer banking services and loans at the same rates the IRS charges. If they aren’t paid back, make a law that adds it to your tax bill, plus interest.
     
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  15. VAg8r1

    VAg8r1 GC Hall of Fame

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    As I've said before the US has the best Congress that money can buy. While recipients of campaign contributions from payday lenders are members of both parties, the overwhelming majority tend to be Republican. Furthermore, the presidential candidate who promised to drain the swamp has become the "swampiest" POTUS in history following his election. The recession of the rules on payday lenders can best be described as return on investment.
    Payday Lenders: Money to Congress | OpenSecrets

    Trump And Lawmakers Got Cash From Payday Lenders, Then Weakened Lending Rules

    CFPB Drops Investigation Into Payday Lender That Contributed To Mick Mulvaney's Campaigns
     
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  16. gatorknights

    gatorknights GC Hall of Fame

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    Don't look now, but the return of the son of the Liar Loans is coming soon to a fraud fest near you.

    No Pay Stub? No Problem. Unconventional Mortgages Make a Comeback

    "Regulators have highlighted risks in these. “Some banks have initiated this practice without the appropriate risk governance controls,” the Office of the Comptroller of the Currency said in a December report. The bank overseer has noticed a range of methods for doing asset-depletion calculations and wants to make sure the level of oversight is commensurate with the level of risk in these loans, according to people familiar with the matter."

    The more things change, the more they stay the same. You know, those over burdensome regulations and all...
     
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  17. oragator1

    oragator1 Premium Member

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    A previous appraisal on the property is being used with a reasonableness check for current value (which is why the hit rate is low, there has it be one on file with whomever they are submitting through). LTVs are limited and lenders are on the hook if the home was in unacceptable shape. The previous appraisal has to have been considered good by the the GSE as well. Now bringing back limited or no doc loans is another story. Can’t imagine how that would work, unless they are keeping them on book, because no one in their right mind would buy that security. Either way, they should stay relegated to the trash heap.
     
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  18. The_RH_Factor

    The_RH_Factor GC Legend

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    AOC wants the government to print more money so maybe the federal government could give some to people to help pay their bills.
     
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  19. WarDamnGator

    WarDamnGator GC Hall of Fame

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  20. fredsanford

    fredsanford Premium Member

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    Fraudulent university, fraudulent foundation, fraudulent for-profit colleges, fraudulent payday lenders, fraudulent real estate companies, fraudulent ladies' shoes companies...
     
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