Payday lenders likely doomed in Ohio. Good.
The Senate was unable to find a compromise that both satisfied payday lenders and eliminated the debt trap that bill supporters said forced too many borrowers to take out new loans to pay for old ones. So it did what the House did last month: dropped the hammer.
“I think everybody said there is just no way to redeem this product. It’s fundamentally flawed,” Bill Faith, a leader of the Ohio Coalition for Responsible Lending, said of the twoweek loans. The industry “drew a line in the sand, and the legislature kicked the line aside and said we’re done with this toxic product.”
House Bill 545 would slash the annualized interest rate charged by payday lenders from 391 percent to 28 percent, prohibit loan terms of less than 31 days and limit borrowers to four loans per year. It also would ban online payday lending.
Yes in a small number of cases payday loans are helpful. In the vast majority of cases they harm citizens and the economic well being of society. Legislators should act to fix practices that harm the economy.
The best method to avoid problems with debt collectors is to avoid debt problems (Create Your Cash Reserve – use your credit card responsibly – Buy less stuff). But if you do run into problems and get stuck dealing with debt collectors in addition to the financial trouble you may find yourself very frustrated and stressed. The Fair Debt Collection resource of the Federal Trade Commission provides useful information:
Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, debt collectors may not:
- use threats of violence or harm
- publish a list of consumers who refuse to pay their debts (except to a credit bureau)
- use obscene or profane language; or repeatedly use the telephone to annoy someone
Debt collectors may not use any false or misleading statements when collecting a debt. For example, debt collectors may not:
- falsely imply that they are attorneys or government representatives
- falsely imply that you have committed a crime
- falsely represent that they operate or work for a credit bureau
- misrepresent the amount of your debt
- indicate that papers being sent to you are legal forms when they are not
- indicate that papers being sent to you are not legal forms when they are
Why is such a resource needed? Because many debt collectors have behaved unethically and illegally. To file a complaint use that link or call toll-free, 1-877-382-4357.
FTC 2008 Report on Fair Debt Collection Practices Act
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As the credit card companies continue to prove they are not interested in providing value to the customer and making a fair profit from the value they provide. Instead they attempt to do whatever they can to get money from customers. I would guess because they can get more from careless customers that don’t block each attempt to take their money than the companies have to pay back or pay in fines.
J.P. Morgan Chase — What Every Person With A Credit Card Should Know
Canceling cards from companies that repeatedly treat customers as a source of ill gotten gains is wise. Unfortunately most options seem to be led by the same unethical tactics. Some credit unions seem to actually believe in providing a fair service and treating customers with honesty and integrity (though many just outsource credit card service to a company that has no interest in the mission of the credit union to serve members). During the era of the robber barrons it was accepted that business was amoral. Since then it is understood morality applies in the business world – some people just case less about morality than cash.
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Regulators zero in on credit card reform
The plan would allow consumers more time to pay their monthly bill. It would prevent companies from applying interest-rate increases retroactively to pre-existing balances. And it would ban “double cycle billing,” a practice that computes finance charges based on previous billing cycles.
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U.S. consumers were saddled with $850 billion in credit card debt as of the end of last year, according to the Consumer Federation of America.
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“It’s a good first step in addressing a number of abusive practices,” said Travis Plunkett, legislative director at the consumer federation. “However, it will still be necessary for Congress to step in because the proposal only deals with a few of the problems that have been identified.”
At the same time, legislators could have quite a fight on their hands. Previous efforts trying to reform the industry have largely failed, while recent legislative proposals have found little support among GOP lawmakers.
The credit card companies pay politicians a great deal of money. That is the reason sensible regulation has failed. Now those fighting for sensible regulation have to have such an obvious case that even those taking huge amounts of money from the credit card companies can’t stymie sensible rules. Remember to follow our credit card tips to avoid the pitfalls that catch so many – that don’t read our blog 
Related: Legislation to Address the Worst Credit Card Fee Abuse, Maybe – Sneaky Fees – Incredibly Bad Customer Service from Discover Card – Hidden Credit Card Fees