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Golden State regulators want to bar Internet lenders from linking electronically to borrowers' bank accounts and instead require them to accept paper checks as repayment. The proposal is a technological step backward, and it could ultimately force many online lenders to pull out of the nation's largest state.
April 20 -
Proposed new rules from the CFPB could wind up forcing banks out of the small-dollar lending business, leaving cash-strapped consumers with fewer borrowing options.
May 22 -
The CFPB's proposed reforms for payday and other high-cost loans are both welcome and long overdue. But there are two ways the agency can further improve future requirements.
March 30
Payday lending activity increased in California last year, but the size of loans and fees charged both declined, according to a new report from California's banking regulator.
The total amount of payday loans rose 6.66% to $3.38 billion in 2014, compared to 2013, the California Department of Business Oversight said. The total number of transactions handled by payday lenders rose 2% to 12.4 million. The number of payday loan customers increased to 1.8 million.
The average size of payday-loan transactions fell 9.6% to $235. The average annual percentage rate on transaction fees fell to 361% from 408%.
California defines payday loans as any transaction in which the consumer gives the lender a personal check for the amount of money desired, and the lender provides the money minus fees. State law limits fees to 15% of the check amount, and each loan to $300 minus fees. The lender deposits the check for no longer than 30 days.
