The customer Financial Protection Bureau is anticipated to propose brand new guidelines this week that may finally reel in payday financing.
This illustrated history tells you all you need to find out about the checkered reputation for payday financing and its own uncanny success in thwarting state and federal regulators up to now.
Late 1980s to mid-1990s
Always Check cashers begin offering customers loans against their next paychecks, guaranteed because of the borrower’s postdated check. The loans are lucrative — and in most states, including Ohio — prohibited at $15 per $100, an annual interest rate of 391 percent.
In reaction to industry lobbying, Ohio’s General Assembly grants payday loan providers an exemption through the state’s 8 per cent usury price cap, allowing payday stores to lawfully charge triple-digit interest. Continue reading