New payday loan laws in 2010
How are the new laws going to affect consumers?
Washington and many other states have implemented new legislation on the payday loan industry. Starting January 1, 2010 new legislation will go into effect in Washington State. Washington’s new rules to further regulate the short term loan industry are as follows:
- You may only borrow a total of $700 or 30% of your gross monthly income, whichever is less.
- Your information will be registered in a state-wide database, ensuring that all payday lenders have your most up-to-date loan information.
- You may only take 8 payday loans per 12-month period.
- If you are unable to repay your loan before your loan is due, you may request an installment plan with no additional fees.
- If you currently have an installment plan you may not receive another loan.
- Lenders may not harass or intimidate you when collecting a loan. If you are harassed, contact DFI and file a complaint.
These regulations were taken from Paydayloanlegislation.com on Jan 12, 2010.
Who’s in charge of licensing and regulating the Industry?
In Washington State, the Department of Financial Institutions or DFI is currently in charge of regulating the short term loan industry for the region. DFI also accepts customer complaints particularly about being harassed or intimidated for an outstanding loan they may have. DFI takes other complaints as well. Consumers are really encouraged to report any and all bad dealings they experience to this institution. I think the future goal is to build up an arsenal of bad consumer reviews to prepare and make a case against the industry that is much stronger than it previously was.
Many would love to see payday loans banned
I believe this initiative is greed based political issue. The industry is being accused of being an economic financial blunder that is taking advantage of innocent people and forcing them into debt. This is furthest from the truth, short term loans have existed in the American economy since the very beginning. In fact Today’s economic system would collapse if short term loans were outlawed. So ultimately it is a big mistake for banks to seek out lobbyist who will help in their quest for greed. Overdraft fees are big business for banks. In turn these fees are making bank executives richer than ever before.
Can’t we all just get along?
The short term loan industry has put a stick in the banks plans of domination by providing a service that will enable people to borrow money instead of being charged over draft fees and thus in the long run actually saving money. Whatever expense big bank executives have use to persuade politicians to lobby for their cause has definitely been worth the risk and it seems to be paying off for them. For the moment it looks like the government has the payday loan industry by the roots, but rest assured the industry will never be destroyed and they will always find a way to provide short term loans to Americans in need. So get out there and exercise your right to avoid overdraft fees by requesting a short term loan today.