Payday Loans in Alabama could soon be much tougher to get
Too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt,” said CFPB Director Richard Cordray. “By putting in place mainstream, common-sense lending standards, our proposal would prevent lenders from succeeding by setting up borrowers to fail.
The CFPB research showed that median fee on a payday loan is $15 per $100 borrowed with a median loan term of 14 days, resulting in an annual percentage rate of 391 percent on a loan with a median amount of $350. Those fees generated $3.6 billion in fee revenue in 2015 for the estimated 15,766 payday loan stores across the U.S.
Lenders would still have the option to loan up to $500 to consumers without a full-payment test but only to consumers without any outstanding short-term loans. Long-term loans would also be available but the interest rate would be capped at 28 percent and the application fee could be no more than $20.
Read the entire artice: AL.com