Payday lenders are attacked a piece of federal legislation aimed at protecting consumers from so-called payday loans by noting overdraft protection plans do not face similar regulations.
"CFSA has a long-standing record of advocating for responsible regulation of the payday advance industry and strong consumer protections for our customers," said D. Lynn DeVault, president of the community financial services association, the largest payday lending trade group, in a prepared statement against HR 1214, a payday lending reform act.
"But this bill goes too far, most notably in establishing a national fee cap for payday loans, one small segment of the short-term credit market. We're aware of no other short-term credit product that has a national fee cap, certainly not bank and credit union NSF and overdraft protection fees or credit card late fees," said DeVault.
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HR 1214 would cap the interest and fees on the low dollar amount, short term and high interest loans at 15%. It also would mandate a lengthy list of disclosures and procedures around the loans.
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