A group of consumer advocates has shown strong response towards the support shown by Florida’s delegation for the U.S. House of Representatives over the payday lending business and the industry as a whole. The consumer advocates sent a common letter signed by all the group members that read – “we strongly disagree with any misconception or wrong perception on our part.
However we strongly support the Florida’s regulation and the financial structure that has the ability to safeguard prospective borrowers in Florida from continuous economic or financial harm.”
According to sources, more than twenty groups have signed this letter. The groups include but are not limited to the United Way of Florida, Florida Consumer Action Network, the Legal Aid Service of Broward County and Dade Legal Aid. It is important to know here that payday loans are high interest loans that are often borrowed by low income people to meet both ends in their financial crunch. These bad credit loans are available online and are believed to be predatory in nature, claim leading loan experts of the loan industry.
Sources claim that a member from the Florida’s delegation signed a letter back in April this year that included strong criticism of the policies that have tighten the regulations related to payday loan in the country. He said that ‘the new rules are more restrictive and leave less freedom for the borrower. The Florida’s legislation requested the lawmakers to follow the lending laws of the Florida. The delegation was confident that the Florida’s laws have the ability to protect the borrower’s interest.
Consumer advocated strongly believe that the state laws lack the ability as well as the strength to protect the citizens of Florida from the debt trap. They believe that this debt trap is never ending as the borrowers caught in it require lot of time to become free from the clutched of the payday lenders. As per the delegation, borrowers in Florida are mentally forced to seek new loans to clear the old ones in Florida. This trend in making the whole financial system full of loopholes.
According to Center for Responsible Lending, an average borrower of Florida takes nine loans in a financial year. This organization seeks better regulations and wants the payday lenders to practice ethical lending policies while dealing with borrowers. According to the Center, the average loan amount in Florida is $250 with an annual interest rate of 312 percent.