How did we get to this point, where payday & title loan companies can legally charge in excess of 450% interest?
In the 1970s & 80s,
Government deregulated banking and repealed usury laws, which ultimately removed controls on interest rates.
Due to the new guidelines, lower-income citizens have found it more difficult to secure conventional bank loans and services.
When extra money is needed for an emergency, businesses such as payday lenders, title companies and check-cashing businesses have stepped in to fill the needs that were previously met by local banks.
Without access to conventional bank loans and services, many financial consumers now turn to these predatory companies for quick access to needed cash.
The problem, however, is that payday loan and title companies are using predatory lending practices.
WHAT IS PREDATORY LENDING?
Predatory lending is any lending practice that imposes unfair or abusive loan terms on a borrower. It is also any practice that convinces a borrower to accept unfair terms through deceptive, coercive, exploitative or unscrupulous actions for a loan that a borrower doesn't need or ... can't afford.
CITY OF COLUMBIA ISSUES
With more than 20+ payday loan and title loan businesses operating in Columbia, the number of lenders is disproportionate to the size of our community.
Tennessee is classified as one of the most permissive states in the country, with Columbia being third in the number of predatory lending institutions per capita.
Other than a distance requirement, Columbia has no signicant regulations or zoning restrictions for these type of businesses.
LINKS TO MORE INFORMATION
The 6 Most Common Pitfalls of Payday Loans, and How to Avoid Them
Paycheck Advance Apps: What to Know Before You Download
Who Uses Payday Loans the Most?
Fact v. Fiction: The Truth about Payday Lending Industry Claims
The True Cost Of Payday Loans
Payday Lending in America (Report by Pew Charitable Trust)