Payday loans online direct lenders only at the time when access to the internet was becoming commonplace in American households, illicit businesses and lenders who participated in unfair lending practiced seemed to dominate the World Wide Web.
Thankfully, the federal government—and many states, as well—has stepped in to create and enforce laws designed to protect people who use payday loans.
Truth in Lending Act
One of the things that concerned lawmakers about the online payday loan industry was the failure of certain lenders to provide consumers with all of the information they needed to make educated financial decisions. This resulted in consumers effectively being ‘scammed’ out of their hard-earned money.
The Truth in Lending Act was established to ensure that payday loans online lenders provide consumers with all of the information, terms and conditions that apply to any credit offer. This means that lenders must provide you with the details of your offer in writing before they can extend any credit to you.
Fair Lending Laws
Another important development in the history of payday loans is the implementation of the Fair Lending Laws. These laws are designed to protect consumers from discrimination as it applies to obtaining credit.
Essentially, lenders cannot refuse to provide you with credit based upon your gender, religion, race or any other reason that is not strictly financial in nature. This means that any failure to be approved for a loan because you fail to meet the guidelines cannot be considered discrimination.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act applies to all credit industries and not just the payday loans online direct lenders industry. Its purpose is to protect consumers from abuse or harassment as it relates to debt collection.
According to the Act, lenders may not contact consumers before 9am or after 8pm in their local time zones, they may not lie to or deceive consumers to collect debt, they may not threaten criminal charges when such charges are not warranted, and they may not use any language that could be considered harassing, abusive or vulgar.
These days, even individual states are doing their part to protect consumers from illicit or illegal practices relating to payday loans. Many states have limits on the amount of money consumers can borrow, the maximum amount of interest that lenders can charge, how many rollovers or extensions consumers may have, and even how many loans consumers can have outstanding at any given time. These regulations are secondary to federal law, and the two entities work together to protect consumers.
What was once an industry fraught with fraud and unfair lending practices is now an industry that is regulated just like any other payday loans online direct lenders only. Consumers can rest assured that the federal government, the states in which they live and even cash advance are all looking out for their best interests.
Blue Hills Bank, formerly Hyde Park Savings Bank, is a 140 year old mutual savings bank headquartered in Hyde Park, MA. Blue Hills Bank provides consumer and commercial deposit and loan products to Eastern Massachusetts through our branch network and eCommerce channels.
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