It came to my recent attention that the Consumer Financial Protection Bureau (CFPB) is expected to propose new rules that will affect short-term loans (i.e. Pay Day Loans). The rules were made in the belief that it'd give customers time to think on "whether they actually need the loan" or "whether they actually need the amount they want to borrow".
I do not believe that...peoples' financial situations change at a moment's notice, and if they need the money, they'll try to get it wherever possible. Ultimately, in the end, Pay Day Loans are and always will be a product that customers CHOOSE
to use (or not).
A while back, I hated loans with a passion because of how hard they can be to pay back as well as the costs associated with making minimum payments (or being late to pay back). However, when I started working for Advance America back in February of 2014, I came to realize how important these short-term loans are to some people. Some people use it as a stepping stone to build their credit rating quickly, some use it to cover shortfalls in their paycheck, and some use it constantly because to them, a Pay Day Loan IS
a secondary paycheck to them (after they pay the fee and redo their loan for the same or greater amount). Most banks aren't willing (or flat out refuse) to offer short-term loans, especially when they got a lot of money to make from the larger loan services/products they offer.
In my time working for Advance America, I've heard the stories, I've seen the gratitude of customers that were able to get the money they desperately need, and I've seen the heartbreak of those that truly do need the money, but can't because they lack certain requirements. In my opinion it is already hard enough
for people to get a short-term loan. There's certain requirements that have to be met (Proper documentation, verification of income, etc.), all requests are subject to credit approval (for those with poor or no credit history, the most some can borrow is $100 (the PDL minimum in MI)), and of course there's the lazy, cheap people that only want "free money" and won't pay back...and because of those type of people, it leads to safeguards that affect the good customers.
The CFPB is basically assuming that people are hastily making irrational, irresponsible decisions when it comes to short-term loans. It is not the place of a government entity to decide how people use certain loan products, especially when everyone's financial situation is so drastically different from person to person. Down below is a link to a petition on the White House website that expires November 19th...this Thursday!
We need 100,000 signatures
for the White House to review it and give an official response. As of the posting of this journal, we're approximately 3,600 signatures
away from that goal.
Since this is a petition originating on WhiteHouse.gov, it is most likely that non-US Citizens will be able to sign the petition. In that case, merely passing the word along will do just as good in case you have friends in the US that hasn't heard about this.
Thanks for all your help! petitions.whitehouse.gov/pe...…