On this blog we have discussed the perils involved in payday and other types of short term loans. These loans are often attractive to people who are having financial difficulties because they often offer short-term solutions without the difficulties of obtaining traditional financing. These lenders often advertise that “all you need to obtain a loan” is a car title or a pay stub and you can walk out with a certain amount of cash that day. What they do not advertise is that their interest rates are usuriously high and that many people fall into an endless cycle of debt when they use their services. If you are experiencing financial trouble and are considering using a short term lending service, you should consult with a St. Louis bankruptcy attorney prior to making any decisions. There is not obligation for a consultation and it will not cost you anything; in addition a lawyer is bound by ethical rules to act in your best interest unlike a lender.
According to a report published by the Consumer Federation of America a group of United States Senators has proposed new legislation that is aimed at curbing the most common abuses of predatory lenders. Known as the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act the law would do the following:
- Require all small-dollar online lender to comply with state law if it provided better protections than federal law
- Prevent lenders from making loans that are in violation of the laws of the state where the consumer lives
- Creating new federal enforcement mechanisms to protect consumers from payday lenders that attempt to circumvent state laws by engaging in practices such as locating businesses offshore or affiliating with a Native American Tribe
- Allowing Native American Tribes to use the protections offered by the Consumer Financial Protection Bureau if needed to protect members from predatory lending practices on a reservation and respecting tribal lending laws that offer greater protections than state law.
These are just some of the measures that the law would enact, and has received support from the Consumer Federation of America.
Contact a St. Louis bankruptcy attorney for a free consultation
If you are experiencing financial issues and are considering utilizing a short term lending service, you should consult with a St. Louis bankruptcy attorney before making any decisions. Depending on your circumstances bankruptcy could help reduce or even eliminate your monthly payments. The Westbrook Law Group specializes in bankruptcy law, and has helped hundreds of clients get a fresh start through bankruptcy. To schedule a free consultation with Mr. Westbrook call our office today at (636) 493-9231 or fill out the online contact form available to the right.