In light of recent increases in consumer complaints over payday lending practices, the Federal Trade Commission has been tightening regulations over lenders. Although regulations have been in place for years to protect consumers from scrupulous lending practices, the FTC is stepping up their watch and requiring new measures to be taken.
Payday loans appeal to those who need “fast cash”. These loans are typically packed full of fine print and hidden terms. Many consumers ended in over their heads with debt, and many more forced into bankruptcy to protect their assets from liquidation by these creditors. In the end, what seemed like a quick way to easy money put many people in a financial position they couldn’t get out of.
New Rules For An Old Game
These days the FTC is not turning a blind eye to any payday loan company. Each company is required to provide a list of credit counseling resources to their customers as well as provide a detailed copy of the terms and conditions of the loan. In the past, the issues surrounding payday lenders are not related to a lack of rules, enforcing the rules is the problem.
As more efforts are being taken to protect consumers from non-reputable payday lenders, local governments are also joining the fight. The city of Austin, Texas is following in the FTC’s footsteps and will begin requiring all payday loan companies to register with the city on a yearly basis. Starting January 1, 2012 any payday lending company will be expected to maintain a current registration status with the city, or face a $500 fine. The city also plans to place restrictions on the amount of credit allowed to be extended to consumers and enforce the FTC’s requirement of providing credit information to customers.