| The new Dodd-Frank reform bill that is signed into | | | | This means that the CFPB may chose the |
| law during the fourth week of July 2010 will have | | | | interest rate cap and the payday lenders can't |
| a wide range of changes to many ways the | | | | avoid this cap by registering their business in |
| banks and financial system works. In this article I | | | | states with no usury laws like South Dakota. |
| will describe how this law will change payday loans. | | | | My Opinion |
| Payday Loan Description | | | | I believe these changes are good and necessary. |
| Payday loans are high-interest loans marketed to | | | | The Payday loan companies were preying on |
| lower income customers who normally aren't | | | | people who had no hopes of being able to work |
| eligible for credit cards and small bank loans. | | | | out of their situation with these outrageous |
| Payday loans typically charge between fifteen to | | | | interest rates. Now that there will be federal |
| thirty percent interest for a half a month lend. | | | | regulation they can no longer avoid states usury |
| Old Method | | | | laws by registering in a select few states that |
| Regulation was different for each state | | | | don't have usury laws. |
| determined by the state's usury laws. Companies | | | | Hopefully with these changes people who need |
| would register their business in a state with no | | | | these loans will be able to take them and pay |
| usury and then setup stores across the country. | | | | them back without too much money lost to |
| What Changes | | | | interest and won't need to rely on this service as |
| The new law imposes federal regulation through | | | | often. |
| the new CFPB (Certified Financial Planner Board). | | | | |