News : Bad Credit Payday Loans

Payday-loan bans backfire

It says that after Georgia and North Carolina banned all such high-interest loans, former patrons tended to migrate to even costlier alternatives, such as bouncing checks — and paying expensive bank charges to cover them — or filing for bankruptcy. The former patrons also report being hounded more by debt collectors.

"Our findings raise obvious policy questions," authors Donald P. Morgan and Michael R. Strain wrote. "Progressives may call for something better than either payday credit and (check) bounce protection. We are all for that, but banning payday loans is not the way to motivate competitors to lower prices or invent new products."

Debate over payday lenders has been growing in Utah, which is seen as one of the states with the fewest rules and oversight for the payday industry. However, a growing number of Utah cities have restricted the number of such businesses they allow in their borders.

A working group of the Utah Legislature is preparing legislation to require collecting more information from the industry here, including how many of its loans are really paid on time, how many are extended, what interest rates are charged, how many loans are made overall, and where loans are being made.

Source : http://deseretnews.com