The Consumer Financial Protection Bureau is set to move ahead with a long-stalled rule to protect borrowers from repeated attempts to collect loan payments from bank accounts with insufficient funds.
When Jessica Vega landed her first job out of college as a case manager for a nonprofit organization, money was tight. But she was excited to move out of her mother’s house and into an apartment of her own.
The Center for Responsible Lending estimates that in 30 states where payday loans are allowed, more than $2.2 billion is paid each year by borrowers who earn an average of $25,000 annually. Inalone in 2022, more than 5 million payday loans were issued to some 900,000 borrowers. In some states, the annual percentage rate for these loans
She says she doesn’t know exactly how much she paid in interest and fees on that original $400. But it cost her some pride: It took nearly a year to repay the loan, forcing her to take on two part-time jobs in addition to her regular work and move back in with her mother. “They try all of these different structures and subterfuges and everything they can think of to try to make money off the backs of working people in this state,” Stein says.
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