http://www.washingtonpost.com/business/economy/regulators-to-rein-in-on-bank-payday-lending/2013/04/23/4cf9da7e-ac43-11e2-a198-99893f10d6dd_story.html?hpid=z1
Those who regulate banks are setting stricter rules on the bank's ability to lend short-term high-interest loans. These types of loans are causing some Americans to get caught living loan to loan and forever increasing their debt. Some states have already banned this type of lending, while others have just limited the amount of loans that banks are allowed to make as well as the interest rates. This new regulation would merely limit borrowers from taking more than one deposit advance in a pay period. It insists that a buyer's ability to repay a loan be taken into consideration. These new regulations might greatly help those who are constantly borrowing and help them to learn how to end the constant cycle of borrowing.
These high-risk loans, as we've seen, can cause high volatility in a market when given out in bunches. It's good to see the authorities taking some preventative steps--even if they're small--to avoid another crisis.
ReplyDeleteThe new regulations will benefit everybody in my eyes. It will help stop putting those more and more in debt. It will also help those who continue to take out multiple loans knowing they cannot pay them back and defaulting. This will help our economy grow stronger and help prevent another crisis down the road. Banks should be looking into the consumer's ability to repay a loan because if they cant they will just put themselves further into economic trouble.
ReplyDelete