While a payday loan might seem like a solution to a short-term financial problem, they often end up costing people more money and problems in the long run.
Las Vegas, NV (PRWEB) October 07, 2014
Some loan companies that offer short-term loans known as “payday loans” charge interest rates as high as 355 percent, according to an NBC Connecticut article about such companies, news that came as no surprise to Las Vegas bankruptcy attorney Matthew E. Aaron, co-founder of Aaron & Paternoster.
Aaron expressed his comments in response to an article published by NBC about payday loan companies. (NBC Connecticut, “Online Payday Loan Borrowers Charge Sky-High Rates,” Sept. 10, 2014)
“Predatory payday loan companies often take advantage of people who simply need a little extra money on short notice,” Aaron said. “We realize banks and other financial institutions must charge interest to lend people money. But when the interest people pay on these loans adds up to far more than the original loan, such practices go far beyond the bounds of what’s acceptable and allowed under the law. That’s why we applaud the efforts of state officials taking legal action against payday loan companies that violate the law. This article also reminds that consumers need to be extremely careful before they agree to borrow money from any payday loan company.”
Payday loan companies are only allowed to charge a certain percentage rate for such loans, according to NBC Connecticut. Specifically, the legal limit is 12 percent in Connecticut. The Connecticut Department of Banking investigated several loan companies that charge more than 12 percent for payday loans. Earlier this year, the state reached a settlement with two such companies found to be in violation of the law, according to NBC Connecticut.
Federal law limits the interest rate payday loan companies can charge military families nationwide, according to an article published by KSNV News 3. (KSNV News 3, “Nevada's pay day loan rate among highest in country,” April 22, 2014) The limit is 36 percent, KSNV News 3 reported.
But not all states have limits on interest rates charged by payday loan companies. In Nevada, there are no limits, KSNV News 3 reported. As a result, a study conducted by the Pew Charitable Trusts found that Nevada payday lenders charged an average of 521 percent annual interest on their loans, KSNV News 3 reported.
The Connecticut Department of Banking also warned consumers about the dangers of borrowing money from payday loan companies owned by Native American tribes, according to the NBC Connecticut news report.
“They say you can't touch us because we're on an Indian reservation,” said Howard Pitkin, commissioner of the state Department of Banking, as quoted by NBC Connecticut. “Tribal sovereignty."
Many people probably don’t realize just how expensive or risky paydays can be, according to Las Vegas, NV bankruptcy attorney Glenn A. Paternoster, co-founder of Aaron & Paternoster.
“Many people are forced to file for bankruptcy because of the financial burden of payday loans,” Paternoster said. “While a payday loan might seem like a solution to a short-term financial problem, they often end up costing people more money and problems in the long run. There are many companies out there that take advantage of hard-working people throughout Nevada. That’s why we take these cases so seriously and work so hard to hold companies accountable for their actions.”
For more information about what to do if you believe you’re a victim of a payday loan company in Nevada or California and the legal options available to families, call (702) 384-411 or go to: http://www.aaronpaternoster.com/contact-us/
About Aaron & Paternoster
Located in Las Vegas and serving clients throughout Nevada and California, the experienced lawyers at Aaron & Paternoster have a well-earned reputation for being knowledgeable, dedicated attorneys in Las Vegas, NV that get the job done right. Founded in 1996, the law firm handles a wide range of legal cases, including car accidents, truck accidents, motorcycle accidents, property accidents, casino accidents, bankruptcy, workers’ compensation and other cases. Aaron & Paternoster is committed to helping injury victims obtain the compensation they rightfully deserve. Our firm works on a contingency fee basis. That means clients do not pay any fees if they don’t win.
Aaron & Paternoster
2300 W Sahara Ave #650
Las Vegas, NV 89102