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The CFPB Finds Payday and Deposit Advance Loans Can Trap Consumers with debt
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Sustained Utilization Of Loans Raises Consumer Protection Concerns
WASHINGTON, D.C. â€”Today, the buyer Financial Protection Bureau (CFPB) issued a study on deposit and payday advance loans discovering that for all customers the products result in a period of indebtedness. Free financing standards, high costs, and loan that is risky may donate to the suffered use among these products that can trap borrowers with debt.
â€œThis comprehensive research demonstrates that payday and deposit advance loans place many consumers susceptible to switching what's said to be a short-term, crisis loan in to a long-lasting, high priced debt obligations,â€ said CFPB Director Richard Cordray. â€œFor too numerous customers, payday and deposit advance loans are debt traps that can cause them to be residing their everyday lives off cash lent at huge interest rates.â€
The report discovered that payday advances plus the deposit advance loans made available from a little but number that is growing of as well as other depository organizations are often comparable in framework, function, together with customer security concerns they raise.