Consumer Protection Agency Seeks Limits on Payday Lenders
“What payday lending reflects is the fact that the majority of Americans live paycheck to paycheck,” said Donald C. Lampe, a partner at the law firm Morrison & Foerster, who advises payday lenders.
.. The median income of payday loan borrowers was just over $22,400 a year, according to an analysis of roughly 15 million payday loans by the consumer bureau, leaving many struggling. Nearly 70 percent of borrowers use the loans to cover basic expenses, with only 16 percent tapping the loans for emergencies, the Pew Charitable Trust found.
..The bureau found that during a 12-month period, borrowers took out a median of 10 loans. Borrowers paid median fees of $458. The median amount borrowed was $350. And more than 80 percent of loans were rolled over or renewed within two weeks.
.. Also expected under the rules are limits on the number of times that lenders can gain access to a borrower’s checking account.