Senator Collins’ Committee Examines Predatory “Payday” Loans Issued by Web Lenders

Senator Collins’ Committee Examines Predatory “Payday” Loans Issued by Web Lenders

Maine Bureau of Credit Rating Protection Formal Testifies Ahead Of The Senate Aging Committee

WASHINGTON, DC—Even though Maine rules prohibit the kind of abusive, extremely high-interest, short-term financing methods usually linked with “payday” loans, this kind of unscrupulous financing nevertheless does occur in Maine through Internet-based financing businesses, driving numerous customers further into financial obligation. The Special Committee on Aging, of which Senator Collins could be the Ranking Member, examined dilemmas related to payday loans and deposit advance items within a hearing entitled, “Payday Loans: Short-Term Solution or Long Term Problem? ”

Eric Wright, an employee Attorney for the Maine Bureau of credit rating Protection testified concerning the prevalence that is troubling of financing that Maine customers have actually faced. In accordance with Wright, their department receives day-to-day phone calls from Mainers victimized by these on the web loan providers.

Senator Collins, whom formerly served as Maine Commissioner of pro and Financial Regulation and oversaw the Maine Bureau of credit rating Protection into the McKernan management stated, “We are lucky that Maine’s laws and regulations prevent abusive ‘payday’ loans, which could commit borrowers to spending almost 400 % yearly portion prices, as well as greater, on short-term loans. Under these terms, borrowers, that are generally speaking currently struggling economically, are driven deeper into financial obligation and in some cases, has to take down new loans to settle ones that are old. Borrowers additionally all too often become subjected to threats and harassment by these loan providers. ”

Senator Collins noted that there’s a need available on the market for short-term loans, and that there are numerous lenders that are reputable provide these loans. […]