According to the twis2010.com, the economic crisis in the USA is continuing to expand, the unemployment rate is increasing. Even though the President Obama has recently signed a new bill of financial protection, the situation in the country is not likely to improve soon. But with no respect to how this crisis deep is, Americans are not those people who used to give up, and still manage to have some money in stock. In its latest report the Federal Reserve System provides some figures on the customer debt. Under these figures the overall customer debt is rising, but there is one type of consumer loan that has experienced an upgrade during the last half a year. It is a payday loan, or a so called non-revolving loan, which direct payday lending companies like Pay1Day provide.
In April non-revolving loans, which consist of such types of loans as cash advance or payday loans, student loans, auto loans, have risen for $9.4 billion, which indicates a growth of 7.1% annually. These figures describe how people do need money in the current tough situation. Americans borrow this short-term credit in order they can afford to make a purchase, buy an auto, pay for the studies in college, go to the dentist, etc. Customers take a payday loan, when they just need urgent cash till they get their salary. Customers who don’t have perfect credit record can’t receive any other types of loans. Unfortunately for them, a lot of the States in America have passed a number of legislative acts, which highly regulate and ban the operations of the payday lending companies. But these States haven’t either substitute payday loans for another type of loan, which could let “not perfect” customers borrow money for their short-term needs.
In fact, latest researches of the lending industry indicate that there are more complaints from borrowers against lenders, who just pretend to be real lenders, as well as the number of unemployed people has been increasing for the last few years in the States, which have prohibited payday lending operations. And it is possible that the same governmental policy will be established not just in some States, but throughout the whole country, as a new consumer financial protection bill is likely to be enacted. Under the bill practically all consumer financial products are to be controlled and regulated. It doesn’t depend whether they are small or big, whether they have any attitude to the economic crisis or not. Actually, the companies which have really caused the mortgage crisis are not affected by the new regulation at all.
Hopefully, the customer demand for payday credit will remain at the same high level and help to safe and protect payday lenders. In addition, in order to receive the majority of these loans a customer should have a constant job and an account in bank. So, he is considered to be a reliable and secure borrower, who will be able to pay off the loan on time. Furthermore, the lending company must inform its client about the terms and conditions of the credit when offering it to him.
If the number of consumers asking for credit is growing, probably the authorities should regulate and deal with some other serious problems instead of diminishing working places. Excessive regulation of lending industry can only worsen deplorable situation, which already exists.