NCLR has long supported a strong rule that will take Latino consumer perspectives into account, and which will keep predatory products and practices off the financial market. To better understand why such a rule is necessary, we have shared stories in our Truth in Payday Lending:Stories of Latino Borrowers blog series. Truth in Payday Lending takes a closer look at how real Latinos have fallen victim to payday lending debt traps and the challenges they face to get out of them.
Over the last several weeks, we have shared with you stories of real people who have fallen victim to the underhanded operating practices of payday lenders, caught in a seemingly endless debt trap.
Often, borrowers are just looking to for extra cash to pay off some bills or to fix their car. Such was the case with Ayde’s story. The Idaho mother of three was badly in need of car repairs so she turned to the only place where she knew she could get cash quickly. Ayde took out loans from three different companies ranging from $700 to $1,000. It’s not uncommon for payday loan interest rates to be as high as 400 percent. She has no idea how many times she has had to renew her original loans and she’s still trying to pay them back. Ayde is buried under crippling debt that has led to bankruptcy, closed bank accounts, and harassing phone calls.
Google is the latest enterprise to join the growing chorus of civil rights, consumer, and faith groups concerned with how payday lending companies carry out their lending practices. In a landmark decision today, the technology giant announced that it will ban ads featuring payday lenders. The decision comes just as the Consumer Financial Protection Bureau prepares to issue regulations that would seriously reign in these lenders.
As we have highlighted in our blog series, “Truth in Payday Lending: Stories from Latino Borrowers,” payday lending industry practices have wreaked havoc on millions of consumers. The unsafe financial products they peddle trap consumers, many of them Latino, in a vicious debt cycle that is difficult to get out of.
We all run into problems paying our bills every now and then. Some of us can fill the gap with loans from family or friends. But for many Latinos, especially those with limited access to financial products or services like banks and credit cards, payday lenders are often the institutions they turn to in times of need. Such lenders engage in underhanded practices that have bilked millions from unsuspecting customers across the country.
One such customer was Ana Maria Sosa. In need of a small $200 loan to pay her monthly gas and electric bill, Sosa visited a local CheckSmart in her hometown of Lorain, Ohio.
Getting laid off from your job is never welcome news, but receiving that news during the holidays just adds anxiety to an already stressful season. For Alfredo Romero, the news couldn’t have come at a worse time. With his landscaping job gone, Alfredo turned to the one source he knew would give him some much-needed cash: payday lenders.
In desperate need to get his family through the holiday season, Alfredo took out a $1,000 payday loan from Regency Financial in Mentor, Ohio. He had two years to pay it back.