Online Payday Lenders In the Media

Today's Times has an editorial, Bleeding the Borrowers Dry.  Here is the final paragraph:

A bill pending in the Senate, known as the Safe Lending Act, would require all online lenders to comply with state laws that provide stronger consumer protections than the federal statutes. It would establish once and for all that payday loan borrowers have the right to stop lenders from raiding their bank accounts. State and federal regulators also need to prohibit banks from giving payday lenders access to the automatic payment system in states where predatory, high-interest loans are illegal.

Meanwhile, the American Banker ran Payday Lenders Assail Online Competitors. Brick-and-mortar payday lenders are arguing that states, like New York, which ban payday lending are not going to stop it–because consumers will just go online to get the loans–and are losing out on the jobs and taxes payday lending generates. Consumer advocates respond by citing a Pew Study finding that states with legalized payday lending have only slightly more online payday borrowing as states that bar it–but that states where it is legalized have much more storefront payday lending.

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