Consumer Protection Laws Help You Understand Payday Loan Details, Rates
By J.J. CameronPayday Loan Writer
Those that complain about the unfair practices of no faxing payday loan lenders often forget one fact:
Consumers are privy to a slew of federal protections. Whether these are related to opening savings accounts, taking out cash loans or trying to build a good credit record, individuals have an assortment of rights.
"The
re's a broad array of consumer protection laws that relate to financial activities," said Bob Mooney, deputy director of the Federal Deposit Insurance Corp.'s division of supervision and consumer protection. "Some have been around for a while, and we've come to take them for granted."
For example, the Truth in Lending Act should be understood by all payday loan applicants. Enacted by Congress in 1968, the law is designed to make sure lenders disclose ALL costs in their loan agreements.
Thanks to this legislation, clients can get information about annual percentage rates and late fees when they borrow money through cheap payday loan providers or sign up for credit cards, Mooney said. The disclosure is required before credit is extended and, in some cases, it also must be included in periodic billing statements.
"Consumers can use this information to compare credit products to determine which is the most cost-effective for them," Mooney said. "This is particularly important with credit cards, payday loans and other types of credit."
Therefore, as those who defend payday loans would state, the practice may not be so unfair. Individuals need to ask questions and realize they have the right to various answers.
