U.S. Federal Lawmakers Introduce Payday Loan Bill

By | Jul 29, 2012

Jer Trihouse Payday Loan ConsultingThis federal payday loan bill, by Reps. Blaine Luetkemeyer (R., Mo.) and Joe Baca (D., Calif.) is a revision of an earlier bill. It includes changes to reduce criticism that this new piece of legislation is an attempt to circumvent CFPB.

If carried, this new federal charter would carry some specific rules, including prohibitions against loan periods of less than 30 days in duration. Payday loan lenders would have to evaluate a borrower’s ability to repay the payday loan. Nor could payday loan lenders charge borrowers fees for repaying early. (Note to the reader – this is not a problem in the PDL industry now.)

The new legislation, as proposed, would block regulators from capping the interest rate or fees that non-bank lenders could charge for loans made under the federal charter, which would allow these lenders to navigate current  state usury laws.

The OLA (Online Lenders Alliance), a trade group representing companies that offer short-term loans via the Internet, is in support of this new federal payday loan bill.

OLA President Lisa McGreevy was quoted as stating, “A federal charter, as opposed to the current conflicting state regulatory schemes, will establish one clear set of rules for lenders to follow. This will lead to the creation of innovative financial products for consumers demanding them.”

Read the complete Wall Street Journal Article by Victoria McGrane at here: WSJ New Federal Payday Loan Law Introduced.

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5 Comments so far
  1. Jarvis July 29, 2012 4:04 pm

    This is huge! We’re licensed in four states and using the choice-of-law payday loan model in 12 more. We have been pursuing a relationship with a tribe but this could change the game again. The question is, how long…

  2. Charlie D. August 4, 2012 12:11 pm

    I’m really torn on this issue. Implementation of federal payday loan legislation could make sense. It may level the playing field, provide clarity for all the payday loan lenders and benefit the consumer by ultimately resulting in lower fees.

    Charlie D.

  3. Bob D. August 13, 2012 11:00 am

    Much research has proven that short term loans help a lot people if business practices are fair. However, the government wants to intervene in every part of our lives. We provide our payday lenders with quality offshore services that yield 20%+ more production and 20%+ less cost , predictable and steady growth all while having carefree privacy.

  4. Payday Loan Industry August 22, 2012 1:39 pm

    Carefree privacy? Not in the payday loan space. You guys maybe good BUT the CFPB and the state AG’s are always looking for a scape goat.

    Jer – Trihouse

  5. Bob DePathy August 23, 2012 1:53 pm

    Jer- Of course you’re correct. It seems like the government wants to intrude on all aspects of our lives. No matter how compliant, no matter how much full disclosure, there are always those looking for a scapegoat to satisfy their own agenda.

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