Los Angeles, CA (Vocus) August 12, 2010
As unemployment rates skyrocket and consumer credit options dwindle in the face of changing regulations,the cash lender continues to offer their customers low-price loan options and payday loans even with bad credit. Traditionally, even hard working families with less than perfect credit find it tough to get approved for many sources of credit. And even if they can get approved for a smaller bank loan, it is typically for a higher amount than needed for a quick emergency such as an unexpected car repair. Banks generally have stayed far away from offering $300 loans for a period of only 2 weeks, especially to those with bad credit. But in spite of the big banking industry’s reluctance to offer smaller short term loans to the market which demands these loan products, banks have failed to step up to the plate and address the demand for this type of credit, probably because most of these potential “customers” would be forced into paying more costly overdraft fees if they cannot obtain another form of credit.
Recently Regulation E put an “end” to un-authorized overdraft and nsf charges. Starting this summer, Regulation E allows bank customers to actually authorize whether or not they would like to enroll in overdraft “protection” service, and by “protection” you would actually be allowing banks to charge upwards of $30 for even an overdraft of less than a dollar.
But the end of the “overdraft” era definitely has its unforeseen consequences to consumers. Because this means a potential dip in the $38 billion in overdraft revenue from the year prior (2009), big banks have responded in ways that no one could predict.
One consequence is the end of “free checking” accounts, which generally paid for themselves overall with NSF and overdraft fees. Most banks are no longer offering free checking to new customers, and are now charging some type of monthly upkeep fee.
Partially due to Regulation E, as well as the newly formed Bureau of Consumer Financial Protection, banks are limiting access to credit all across the board. Even business owners with good credit are finding it difficult to obtain credit to help their business during this economic slump.
Despite all of these things, many direct payday lenders such as Pay1day.com are continuing to offer Americans a much needed option for short-term personal finance, even with bad credit!! The need for short-term consumer financial options has rarely been addressed in the wake of continuing regulation against these options. But despite these trends, many payday lenders are still thriving by responsibly providing their customers with tightly regulated and fully-disclosed financial product. In fact, in some states new payday loan businesses are still starting up with the help of payday loan business start up manuals written by more experienced lenders in the industry.
Through these changing economic times, trusted and experienced lenders such as pay1day.com will continue to offer Americans with bad credit the option for small loans whenever they need it.