Payday Loan Debate in Pennsylvania by Senators Continues
English: Cash Money Store for short term loans on Yonge St., Toronto downtown, ON, Canada (Photo credit: Wikipedia)
Well we have seen various debates over the payday loan and the borrowers’ access to it. Again we are to see one more Payday Loan Debate very soon as Pennsylvania senators are on the verge to conduct yet another debate. Once the news leaked, the payday loans supporters and the consumer activists are getting ready for it.
Commenting on the plan to conduct yet another debate, State Sen. Pat Browne of Allentown said that he intends to introduce a new legislation that would redefine the debate over the payday loans industry.
His proposal mainly aims to end the practice of US payday loans, by leading the people back to the traditional ways of loans and credit. His proposal aims at providing a chance to the people to improve their credit rating that would surely help them acquire loans from the mainstream banks and other financiers.
“The new legislation will allow the families to be dependent on the traditional loan providers.”
Though Pennsylvania has not banned the payday loans in the state, there are no storefront loans stores in the state; mainly because the state laws bind them to offer loans at around 24 percent. This loan rate is far lower than the rates at which these short term loans are offered; some of the lenders offer loans at around 1000 APR.
Due to the higher rates, the borrowers find no way to repay the loan in time, leading them to take another loan for a second time, third time and innumerous times. Thus they find no way out. Seeing the troubles of the borrowers, many consumer activists groups have started conducting various protests across the states.
When the borrowers do not have sufficient fund to live on, how will he pay off the loans with additional interest rates, ask the activists groups. They say that majority of the borrowers take out the second loans for repaying the first and the third for repaying the second, and not for meeting any emergency needs in the way the lenders claim.
Though the activists have been demanding for tougher legislation in the state, the legislature has not yet initiated any of them. They do not believe in the legislation proposed by Browne too as it would permit costly loans in the states, only with extended periods of debt.
While the supporters of US Payday Loans industry claim that the new legislations will harm the borrowers more than the lenders, Pew Charitable Trusts report says that the borrowers are forced to take out such loans as they are not able to pay the loan which they have taken in time of sudden crises. Most of the borrowers are not able to repay, the report adds.
Author Bio
Mark Taylor is a blogger and Online Marketing Expert with over 7 years of experience in various Niche including Finance and Loans. This Blog Post highlights about the current happenings in US Payday Loans.
Category: Short Term Loan
