CFPB Starting to Accept Consumer Complaints about Payday Loans
The Consumer Financial Protection Bureau announced that it will accept payments from consumers about payday loan products.
Payday loans, sometimes called cash advance loans, are usually low balance, high interest, unsecured loans which advocates argue are meant to help consumers meet an immediate cash needs who would otherwise have no recourse. Critics argue the loans trap borrowers in endless and expensive debt cycles and have worked with some success to ban them in some states and for military personnel. Credit unions have been engaged in trying to offer members an alternative to the high-cost products and have sometimes drawn the ire of consumer groups who argue their payday loan alternative products are actually payday loans. Some credit unions defended their products on the grounds they are less expensive and do not exploit members.