Payday loan lenders are notorious for high interest rates. Each company can set their rate according to state regulations or any competitive rates. Predatory lenders are those who prey on the customer’s vulnerability. Recently, even banks have been under more intensive scrutiny with their practices as payday loans lenders and other wrongful practices.
Some banks and credit unions have been charged with reordering transactions in order to get more overdraft fee charges. The banks have been a trusted source of financial business, and their reputation has been continuously compromised with continued reports of illegal practices.
Payday Loan Lenders are not the highlight of recent banking news.
Barclays, a UK bank, and fifteen other global banks are under investigation by international regulatory authorities for allegations of falsifying information to benefit traders and interest rates during 2005-2009.
The London interbank offered rate, Libor, is a benchmark interest rate used globally to regulate the interest rates for unsecured loans. Each day, global banks submit their borrowing costs and the average is reported. Banks set their interest rates accordingly. When the Libor rates rise or fall, interest rates do so as well. This base rate is also used on numerous investments, mortgages and college loans.
The subpoenas were issued for the alleged allegations that the banks had provided false information in order to manipulate the Libor rates. Barclays Bank is the only bank which has already been fined for submitting false information during 2005-2009 in order to keep the interest rate low. Reporting the low figures made Barclays seem to be a much healthier business than what it was, showing that it was a stable banks during an unhealthy financial time.
Barclays is now regulated as to how the submissions it makes into Libor. The long lasting effect this has made on the global banking system is yet to be determined, but altering the way trillions of dollars are marketed through loans and investments will surely create a negative impact on the trustworthiness for global banks.
Once finding have been proven, additional names will come out showing that Barclays is not the only bank involved with the manipulation of interest rates.
People finances are always at risk of some fraudulent activity. It is so easy to pick on the small lender for small problems, but as you read here, larger problems come with the masses. How many people could have been affected over the four year time span? There are bad apples to be found in every sac in the business world. It takes times and effort to discover them, but when they do, it will be to the advantage of people from all over the globe.
Here in the U.S., state and federal governments work hard to keep the residents safe from financial institutions who are not practicing with the realm of set laws and regulations. Responsible payday loan lenders fall into this group of financing institutions. Customers will find dishonest lenders or fraudulent representations financiers looking to misguide and scam vulnerable customers. The best practice a customer can do for themselves is to check into the history of the company they wish to do business with. There is a lot to be learned from news posted on the internet.
