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Senator Collins’ Committee Examines Predatory “Payday” Loans Issued by Online Lenders

Maine Bureau of Credit Rating Protection Certified Testifies Ahead Of The Senate Aging Committee

WASHINGTON, DC—Even though Maine legislation prohibit the sort of abusive, extremely high-interest, short-term financing methods usually linked with “payday” loans, this kind of unscrupulous financing still happens in Maine through Internet-based financing organizations, driving numerous customers even more into financial obligation. The Special Committee on Aging, of which Senator Collins could be the Ranking Member, analyzed dilemmas related to payday loans and deposit advance services and products within a hearing entitled, “Payday Loans: Short-Term Solution or Long Term Problem? ”

Eric Wright, an employee Attorney when it comes to Maine Bureau of credit rating Protection testified concerning the unpleasant prevalence of online financing that Maine customers have actually faced. In accordance with Wright, their division receives day-to-day phone calls from Mainers victimized by these on the web lenders.

Senator Collins, whom formerly served as Maine Commissioner of pro and Financial Regulation and oversaw the Maine Bureau of credit rating Protection into the McKernan Administration stated, “We are lucky that Maine’s laws and regulations prevent abusive ‘payday’ loans, that could commit borrowers to spending almost 400 per cent annual portion prices, and also greater, on short-term loans. Under these terms, borrowers, who will be generally speaking currently struggling economically, are driven more deeply into financial obligation and perhaps, has to take down brand brand new loans to settle old people. Borrowers additionally too often become subjected to threats and harassment by these loan providers. ”

Senator Collins noted there is a need available on the market for short-term loans, and that there are numerous reputable loan providers that provide these loans. (more…)