Fast Cash Loans Will Cease to Exist: What’s Next?

The major original population of America still comprises of the middle-class people who work hard day and night to keep body and soul together. They live from paycheck-to-paycheck and often are left with no further savings. In this situation, if the fast cash loans will become tougher to achieve what will happen to these people? Sadly, the Consumer Financial Protection Bureau has nothing to say on this
These loans were mainly availed by the poor ones who got into the habit of taking loans. They do not have many options to banking and thus, these loans are their only savior. As per the new regulations, the lenders have to become strict while giving loans. There has to be a proper assessment of the consumers if at all they could pay the repayment installments and still maintain their living standard even in the last month when the biggest share of the installment is to be paid. This regulation is sure to curb out the short-term loans from the market.
The regulation is said to be introduced in the welfare of the consumers, but, if you are taking a proper look into it you will notice that the Bureau is not at all paying a heed to the common man’s needs. The consumers demand small amount, easily available, quick loans with short terms of payment to help them satisfy their immediate needs.
The new regulations focus on the loans that are given for a period of 45 days or lesser. The loans, if provided, will have to assess the borrower’s capability to repay. The lenders will have to calculate everything like their income, housing costs and minimum monthly expenditure. They also have to set a limit about how many times one can roll over a loan. The lender will be stopped from the permission to debit the borrower’s account automatically. It is true there exist some abusive loans. This will be curbed out by the new rules but that will not help the common public. They, on the other hand, would not create new and reliable options to help the people out of their financial crisis.
Experts say that the market will be shifting towards longer-term loans if they want to survive in the market. This points to an indication of a potential danger as that market is not a regulated one. In states like Ohio, lenders can introduce more harmful loans with higher costs and installment amounts. If the laws are not rectified right away we will get to see more of such nuisance.
Dennis Shaul who is the CEO of the Community Financial Services Association of America calls these regulations as “inconsistent” and “arbitrary”. He is opposed to the laws and also mentions that the new laws which state to determine the financial condition of a person have inappropriate ways to measure the same for the customers. This is because the customers do not have the necessary requirements for credit. These rules if imposed will not protect their customers but limit their ability to avail money when they are in need. However, he denies the fact of being against the Bureau. He says that it is only the rule he is protesting.
These poor underbanked people will have no place to turn to as the banks are looking for more profits. The solution was that only if the fast cash loans exist they will fill the gap. In exchange for high charges, the borrowers would still get the chance to manage their finances with the cash dollars they avail as loans. If the Bureau still wants to go ahead with its decision, then they should offer an alternative for the underbanked people at first.