Federal government looking to regulate payday lenders
Payday loans seem like a quick fix when you’re short on cash, but they can cause you some major long-term problems.
Now the federal government is looking to regulate pay day lenders. The proposed rule would require lenders to make sure borrowers can afford to pay the money back.
Right now it’s up to each state to regulate payday lenders. Idaho doesn’t have any regulations that can keep the high interest rates down. That’s a problem some say needs to be fixed.
“As far as I’m concerned it is helping it’s one of the major thing that helps keep people in poverty, in poverty,” said Russ Spain former executive director of Eastern Idaho Community Action Partnership.
He said it’s a cycle people get stuck in.
” In order to pay off loan A they get loan B in order to complete paying off loan A because of the high interest rate,” said Spain.
He said the interest can reach 500 percent, sometimes more.
Because these places are virtually unregulated in Idaho, that’s why Spain said they’re every where.
“Just drive down the streets of Idaho falls or any other town in Idaho and count the number of payday check and loans, title loans that are within a several block area,” he said.
