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

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

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

WASHINGTON, DC—Even though Maine guidelines prohibit the kind of abusive, extremely high-interest, short-term lending methods frequently linked with “payday” loans, this particular unscrupulous financing still occurs in Maine through Internet-based financing organizations, driving numerous customers even more into financial obligation. The Special Committee on Aging, of which Senator Collins may be the Ranking Member, analyzed dilemmas associated 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 when it comes to Maine Bureau of credit rating Protection testified about the prevalence that is troubling of financing that Maine customers have actually faced. In accordance with Wright, his division receives calls that are daily 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 Protection into the McKernan management stated, “We are lucky that Maine’s regulations prevent abusive ‘payday’ loans, which could commit borrowers to spending almost 400 % yearly portion prices, and also greater, on short-term loans. Under these terms, borrowers, that are generally speaking currently struggling economically, are driven deeper into financial obligation and perhaps, has to take away brand brand new loans to settle old people. Borrowers additionally all too often become subjected to threats and harassment by these lenders. ”

Senator Collins noted that there surely is a need in the marketplace for short-term loans, and therefore there are numerous lenders that are reputable provide these loans. […]