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Payday loans

Update: Save the date, Nashville!

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There’s a lot of interest in our upcoming field hearing on payday loans! We’re changing the location to the Country Music Hall of Fame. The hearing will still take place on Tuesday, March 25 at 11 a.m. CDT. Space is limited, so be sure to RSVP! The event will feature remarks from Director Richard Cordray, as well as testimony from consumer groups, industry representatives, academics, and members of the public.

Country Music Hall of Fame
222 5th Avenue South
Nashville, TN 37203

To RSVP
Email cfpb.events@cfpb.gov with:

  • Your full name
  • Your organizational affiliation (if any)

This event is open to the public. If you need an accommodation to participate, you can make a request.

See you there!

Updated on March 21, 2014: The location of the field hearing has changed and the new address is above.

Our first enforcement action against a payday lender

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Today we’re announcing an enforcement action against payday lender Cash America International, Inc., one of the largest short-term, small-dollar lenders in the country. The company has agreed to reimburse up to $14 million to approximately 14,000 people for robo-signing practices related to debt collection lawsuits. The company will also pay a $5 million penalty for the violations and other misconduct.

Who is eligible for a refund?
You may be eligible for a full refund if you paid money because of a collections lawsuit from January 1, 2008 through October 1, 2012 to any of the following companies:

Ohio Neighborhood Finance, Inc., d/b/a Cashland

Cash America Pawn, Inc. of Ohio

Cashland Financial Services, Inc.

Cash America Net of Ohio, LLC

Ohio Neighborhood Credit Solutions, Inc.

CNU of Ohio, LLC.

If you have not already received your refund, or think you received the wrong amount of refund, please contact the company administering the refund no later than May 19, 2014. You can call them at (877) 524-8480 or find more information on their website: www.voluntaryloanrefundprogram.com

Problem with a payday loan?
You can submit a complaint online or by calling (855) 411-2372.

You can also get clear, unbiased answers to questions about payday loans on Ask CFPB.

What military families should know about payday loans

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Starting today, you can submit payday complaints to us. So this seems a good time to remind you that if you are a servicemember on active duty you, your spouse, and certain dependents have the protection of a special law called the Military Lending Act (MLA). The MLA says that you can’t be charged an annual percentage rate higher than 36 percent on certain types of consumer loans, and that includes certain payday loans as well as auto title loans and tax-refund anticipation loans.

So what exactly is a payday loan? It tends to be a short-term, usually high-cost, cash advance where you pay a fee to borrow money (for example, a $15 fee for every $100 borrowed) and you are expected to pay it back in a short time, usually a couple of weeks. People often tell us that the MLA cap of 36 percent seems like a pretty high limit – but what they don’t realize is that the average annual percentage rate on a payday loan like the one above is 390 percent! And if you roll over the loan repeatedly because you can’t pay it off like you hoped you could, then the cost can skyrocket over time. We’ve seen examples of payday loan borrowers who end up paying far more in fees than the amount they originally borrowed. In some cases they could have gone to one of the military relief societies, if it was an emergency, and gotten a loan at zero percent interest. Yes, zero – no fee at all.

So, the good news is that the MLA provides you protections that the average citizen doesn’t have when it comes to payday loans. And the CFPB is one of several federal agencies that have the power to enforce the MLA. But your complaints are key to helping us enforce it and other consumer financial laws.

You can submit a payday complaint online or by calling (855) 411-2372. Don’t forget to tell us you’re “military” when asked!

Complaints help us spot trends. Submitting a complaint helps us see patterns, focus our resources, and identify the worst actors – so your complaint can make a difference!

You can submit a payday loan complaint

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Payday loans are typically marketed as a way to get quick cash when you need it. They are generally for small amounts due quickly, like on your next payday, and they often give the lender a claim on your bank account. They are sometimes also called cash advance loans.

We’ve heard from people who like the ease of obtaining a payday loan when they need to avoid paying their bills late. Many other people have raised concerns about the high cost of payday loans, not being able to repay the payday loan while still having enough money left for other expenses, and the debt collection practices they encounter if they can’t repay the loan.

Starting today you can submit a complaint if you have a problem with your payday loan. You can submit a complaint about:

  • Unexpected fees or interest
  • Unauthorized or incorrect charges to your bank account
  • Payments not being credited to your loan
  • Problems contacting the lender
  • Receiving a loan you did not apply for
  • Not receiving money after you applied for a loan

You can also get clear, unbiased answers to questions about payday loans on Ask CFPB or by calling (855) 411-2372.

Your complaints help us identify business practices that may pose risks to consumers and we use that information in our work to supervise companies, enforce federal consumer finance laws, and write better rules and regulations.

What is a payday loan?

December in August

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August is usually a time when military families are wrapping up duty station moves, squeezing in summer vacations, and getting the kids enrolled in school. The hazy days of summer are not exactly the time when military parents (or kids) are thinking about December holiday wish lists, door-buster sales, and gift wrapping.

But, believe it or not, the holiday shopping season will be upon us in just three short months. You may not be ready to see Halloween candy at the drugstore yet, let alone think about December holiday celebrations. But, preparing for your holiday spending now can help you avoid being served a heaping side of seasonal debt along with your plate of turkey and stuffing. So, here are a few ways you can start your December in August.

Set reasonable expectations

Last year, it was reported that the average American expected to spend $854 on gifts during the holiday season. While many people won’t spend that much on shopping, any spending that strains your finances or saddles you with post-holiday debt is bad for your financial future —period. Take the time now to talk with family and friends about realistic holiday spending limits. Consider less expensive gift options like homemade gifts. If you have a large extended family, maybe it’s time to start a new tradition of picking one person out of a hat to buy a gift for, rather than everybody buying a gift for every single other person in the family.

Plan, budget, and save

Figuring out who’s on your gift list, creating a holiday budget, and gradually setting money aside can help you avoid overspending, unwanted debt, and financial stress. You can find helpful budgeting tools on mymoney.gov. Also, check with your bank or credit union to see if they offer a Christmas club or holiday savings accounts that you can use to save for your holiday goals. Old-fashioned layaway is another option.

Keep the big picture in mind

It can be easy to forget that we spend a lot of money on other things besides gifts during the holidays. Big holiday dinners, travel to see family and friends, and even increased electricity costs to run that massive holiday light display can drain your bank account. Make sure you plan for the cost of all of your extra holiday activities.

Look for ways to save

Doing things like catching early sales, comparison shopping, ordering from sites or stores that offer free shipping, shopping at discount stores, and buying items that offer rebates can help save you money on holiday purchases. Saving money for your shopping and saving money while you’re shopping should be a dual goal.

Watch out for costly surprises

Make sure you fully understand the term and conditions if you’re using gift cards or layaway plans. For instance, expiration dates, inactivity rules, and hidden fees on gift cards can eat away at their value if you’re not careful. Take the same cautious approach with store credit cards that you’re offered at checkout. They might save you a few bucks at the register today, but stick you with very high interest rates later.

Avoid holiday debt traps

Not all deals are a bargain, so don’t get sucked in by holiday “super sales”. If you rush to a store sale because you can get a $3,000 TV for $2,000, you’ve still spent $2,000 on a TV. Was that really something you had planned to do? Also, don’t be enticed by payday lenders who want to “help” you get your hands on holiday cash. Proper planning and saving long before the holiday can help you avoid a cycle of high-interest debt that can last for weeks or even months after the holidays are over.

Keep in mind that holiday spending is short-term spending. Once the unwrapping frenzy is over, how long does the excitement last? Saving your money for long-term goals like home ownership, college or a comfortable retirement may be the very best gift you can give yourself and your loved ones.