The Ohio Supreme Court’s ruling that challenged the laws made to protect borrowers was followed by Senator Sherrod Brown’s fresh attempt at ensuring protection for borrowers from payday loan companies that preys on weak borrowers. Maya Reed, from Columbus, who was a former manager of financial services at a local company, also joined Brown in his attempts. Their aim is to help “hardworking Ohio families” who may be trapped by unregulated payday loan companies.
Studies have shown that almost over 12 million citizens use payday loans in a year and lenders are increasing in number all the time. In addition, there are also a lot of lenders who do not abide by the state laws that regulate the payday loan industry. Facing such challenges Brown made an attempt to bring it back to track by sending a written communication to Consumer Financial Protection Bureau (CFPB) requesting them grant stronger protection laws. Such laws should be able to help hardworking individuals who seek pay day loans to not fall prey to greedy lending companies. He has requested for attempts to rectify inadequate laws that may exist in the payday loan industry.
The new payday loan laws may limit lenders to roll over the loans to only twice. In addition the new law also may restrict lenders from making constant search into the bank accounts of the borrowers in an attempt to collect the money they have lent. The new rule is designed to discouraging lenders from giving out loans to individuals who are not financially strong and cannot afford to pay back the money borrowed within the original term of the loan. This law also tries to protect such borrowers from increasing costs.
Payday lenders are known to offer short-term loans lasting a few days or weeks. While activists agree that there can be additional charges when debts are rolled over or when borrowers miss payments but they disagree with the popular belief that annual rates may increase beyond 5000 percent. According to them debts are usually paid back earlier than reaching that rate accrues and the new laws should be able to offer stronger protection for borrowers.