More reforms suggested for Payday lending
Recently the public is pushing off the State law authorities to make advisable changes in payday lending rules and regulations in order to improve the existing conditions and maintain better law and order in the particular sector.
According to a latest report published on the existing rules and regulations of payday lending scheme ongoing in Ohio, it was found the most the people believes that reforms is must for the system. This will not only improve the existing but will beneficial for the coming times.
As per the survey conducted, it was the found out that the most of the people from the Ohio are in favor to modify the current rules of this lending sector.
As per the findings of the survey it showed that the most of the participants supported the idea behind the law proposed and implemented four years back in the year 2008 that aimed to control the payday lenders from charging high interest rates to the borrowers. The rule restricted the lenders to overcharge the borrowers on the 15 days loan lend to them that mostly turned out to be $500. But implementing the law was not easy as high number of borrowers failed to pay back loans on time that led to hard failure due to such situations leading to the financial setback. This also led to lenders overcharging the borrowers by higher rate by around maximum increase to 10 per cent than the original suggested interest rate.
The report also shows that the people’s view should be appreciated and accordingly changes should be implemented.
The Authorities has been persistently trying to check these mal practices but fails to do so due to lack of any specific law targeting the this particular offence. The Ohio law was found weak and could save the borrowers from the lenders trap those who charge significantly high rates to them. Such problem is even due to poor co-ordination among the bank accounts transfer and transportation of cash.
Suggestions made to improve the conditions:
Many evidences have been found alleging the exploitation of the innocent borrowers which should not be ignored by Ohio department of commerce and should take matters more seriously.
Keeping in view the current situation it is been proposed that check cashing services should be lined –out with a particular fee structure or should be made free so that the people should not be overcharged. The operating banks should give such facilities free of cost or at nominal cost to its account holders. Being a quick cash option the lenders could not be ignored hence the improvements is much required in this sector.