What will the Financial Reform Bill do to payday loan companies? (Photo Credit: ThinkStock)
President Obama has signed the Financial Reform Bill, and according to a survey by AboutPaydayLoan.com, payday loan employees are worried for their jobs, writes PR Web. Many of the poll respondents assume that the subsequent creation of the Consumer Financial Protection Bureau (CFPB) will mean restrictive regulations against the cash advance and online payday loan industry, which will result in making many payday loan companies unable to function.
Payday loan employees give voice to their fear
According to one payday loan employee who responded to AboutPaydayLoan.com’s survey, the ripple effect of the Financial Reform Bill has many like him searching for higher ground before the storm. “If CFPB ends up putting a crazy cap on payday loans,” he said, “then we will be out of jobs.” The rate cap referenced is a 36 percent annual percentage rate that is rumored to be headed for brick-and-mortar and online payday loan companies nationwide. Such a low ceiling would make it all too difficult for many payday lenders who fail to diversify and operate under a less restrictive lending license. These lenders would find it impossible to meet expenses such as payday loan employee salaries, let alone turn a profit.
There’s too much cash advance regulation already
Many have argued that the combination of local and state regulations on the payday loan industry have been enough to safeguard consumers and enable businesses to continue to function. Thus, the addition of a power layer of federal regulation, courtesy of the CFPB, is considered prohibitive. As one reader who is an employee of a small payday loan company commented on a cash advance industry-related blog called the Payday Loan Blog:
“I am getting so flustered with all of this. Every day I wait on news that will shut us down or news that they will leave us alone. I feel as if many of us are on pins and needles wondering if soon we will be in the unemployment lines. Job security is gone, and a lot of the zest that I once had is fizzling out. I am not alone in this. There is uncertainty in the air. … I sure wish at least we knew what and when these changes would occur.”
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i read that and i am really sad that they are closing..when the people would understand that they are in business to help people…
The Payday Loan transaction are now discrete.
Payday Loan are very flexible now these days. The borrower can really relax after getting payment checks.