Thursday, June 10, 2010

Report says payday-loan alternatives can also hurt consumers

National Consumer Law Center: Some loans offered by banks and credit unions as “alternatives” to high-cost, short-term payday loans may instead plunge consumers into a costly and nearly inescapable debt cycle – just like payday loans!

That’s the warning contained in “Stopping the Payday Loan Trap: Alternatives That Work, Ones That Don’t,” a report issued today by the National Consumer Law Center.

“Too many providers of so-called payday loan alternatives hit consumers with some of the same onerous provisions that predatory lenders use to saddle unwary and vulnerable borrowers with loans they can’t afford to repay,” said Lauren Saunders, managing attorney of NCLC’s Washington office and principal author of the report.

To download the report, click here.

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