By Josh Mitchell
Corinth Today News Editor
Around Corinth there are many businesses that offer payday/title loans, and there is a big difference of opinion in terms of whether those kinds of lenders help people in need or just put them in “debt traps.”
On Thursday, proposed federal regulations were announced that could impact the payday/title loan companies in Corinth.
Corinth Today went to about six of the businesses on Thursday morning seeking comment on the proposed new federal regulations. Within just about a two-block area on Highway 72 there are several such companies.
The proposed regulations would be “aimed at ending payday debt traps by requiring lenders to take steps to make sure consumers have the ability to repay their loans,” a news release from the federal Consumer Financial Protection Bureau states.
“Too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt,” CFPB Director Richard Cordray said in the release.
Advance America Sr. Vice President Jamie Fulmer told Corinth Today that he thinks it is incorrect to characterize the payday loan business as a debt trap. Advance America, which has a branch on Highway 72 in Corinth, has high customer satisfaction, he added.
Fulmer said companies such as Advance America “meet a consumer demand.” Many hardworking, middle-class people run into situations and need short-term credit, he added.
In addition, the proposed federal rule says lenders would have to get permission from the borrowers to continue debiting a bank account for payment after two unsuccessful attempts. Borrowers can rack up insufficient fund fees when their accounts are continually debited, the release adds.
The proposed rule is 1,500 pages, Fulmer said, adding that he thinks it will create consumer confusion and not protection. Moreover, Fulmer said the rule would reduce access to credit for millions of Americans and potentially “decimate” an entire industry.
For more information about the proposal click here.