The Consumer Financial Protection Bureau was created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The Consumer Financial Protection Bureau has begun unveiling new proposed rules to regulate payday lenders and payday lending.
The rules protect consumers by regulating the maximum interest rate allowed on these short term loans.
The new rules are considered necessary because of tactics taken by short-term payday lenders charging interests rates above three hundred percent (300%).
The CFPB has also turned its attention to payday lenders taking a lien on the borrower’s car to secure a short-term loan with interest rates above thirty-six percent (36%).
About 15 million loans were analyzed by the CFPB, which found a large majority of borrowers used the money to cover ordinary household expenses, and about 15% of borrowers used the money for emergencies.
The ordinary borrower of short-term payday loans has income around $22,500 per year.
If you have defaulted on a payday loan, you may be contacted by a debt collection agency or served with a debt collection lawsuit. Your wages can be garnished and your bank account can be frozen. However, if you are sure to properly respond to any legal debt notices you receive, you can protect your rights and stop abusive debt collection.
If a payday lender or debt collector violates your rights in the lending or debt collection process, you may be entitled to a statutory award up to $1,000, plus the lenders and collectors are required to pay the legal fees you incur to file the claim. That means there is no out-of-pocket cost to you to hire our debt relief lawyers to file a claim.
Dealing with a payday loan collection company can be even worse than credit card debt collection firms Forster & Garbus LLP and Cohen & Slamowitz LLP a/k/a Selip & Stylianou LLP or debt buyers like Midland Funding LLC or Portfolio Recovery Associates LLC.
Be proactive, and contact us for a free case review.