What would it mean to customers to have online payday loans regulated differently? Would a more blanket approach across the states be better in controlling online lenders?
Brick and mortar payday loans are set buildings within a high payday loan user population. People go to the location for their loans and get the money right there on the spot. Since the fixed location of the lender limits the customers, individual state regulations work very well for this situation.
How are state regulations not working for online payday loan lenders?
The Internet is not so easy to regulate. Worldwide access makes regulating anything a tougher job. It is much easier and less costly to set up a fraudulent company online than an actual storefront. There is also the problem of a government not being able to control companies which are not under their jurisdiction.
As of now, many states have set guidelines which must be followed for a lender to process loans for residents. There are capped limits for loan amounts and interest while some states have even capped how many loans can be taken out at once. If your state has loose regulations, online payday loan lenders of all kinds will have more flexibility in rates. A key ingredient to this problem is that not all lenders are responsible. Some put their business revenue forefront with their payday loans.
In all states, no matter what regulations have been set, there is an influx of offshore companies promoting their payday loan companies to Americans. The catch to these companies are that they can offer much larger loans to those who are in need of cash who may be turned down by American businesses. Companies run by Native American tribes have branched into the online lending area as well. Someone who is desperate for cash may not pay attention to the sky high fees attached to these unregulated loans. Collection practices will also cause problems.
So why suggest flat regulations for all states? It’s an idea, one which would have people arguing both sides. Keeping responsible lenders out of business within certain states will not limit residents completely, but put them in contact with predatory lenders. Giving everyone within the United States the same access to direct online payday loan lenders would help deter those residents, who want a loan, from obtaining one from someplace else. It’s putting everyone on the same playing field, have competitive prices within the regulations and allowing all citizens access to choose for themselves. It could help those residents who have limited availability and end up choosing a predatory lender.
Brick and mortar payday loans and direct online payday loans are different. There is no way a store can be open to loaning to the masses as online lenders. Why would they be governed the same?
Spotya! Payday Loans is an online direct lender who promotes responsibility for all lenders and borrowers. Spotya.com offers some of the competitive fees on the internet and has set up lending guidelines to help support loan success for all clients in any state where services are rendered. Shop around and find a business you can trust. Be careful of those lenders offering the moon, you would not want to end up with skyrocketing debt.
