Be Sure to Avoid this Sneaky Gmail Phishing Scam

In our day-to-day lives we rely on technology so much that most of us consider ourselves to be pretty savvy. In fact, the majority of people who regularly use online services, like Gmail, believe that they are not likely to fall for phishing scams. The truth is, however, that no matter how tech savvy you are, there are simply some email phishing scams that are so sneaky they are able to fool even the sharpest people.

There is a new phishing scam that has been able to dupe people who may not ordinarily get taken in by online scammers. This phishing scam is a bit more elaborate than some of those that we have seen in recent years. Here’s how it goes down: Hackers will send the victim an email. The email has an attachment. If the victim should click on the attachment to get a quick preview, a new browser tab opens that appears to be a Gmail login screen. This, however, is not the case. If the victim continues on and puts in their username and password, the hackers get access to your account and can do with it what they will.

Some people may believe that they would never open a message from some random person to begin with. This is the catch with this scam: the email appears to be from someone that you know. The hackers who created this dangerous phishing method have managed to make these emails appear to have been sent by someone from your contact list. The messages even feature subject lines/attachment names that are similar to something that you have received from a trusted contact in the past.

Of course, the hackers don’t want this scam to end with you. Once they have access to your Gmail account, they will likely use your contacts to perpetuate the scam. Some people have said that there is no way that they would log into Gmail at the behest of this scam. The hackers have made the new login look very legit. For example, when people open these attachments they see something like this: “data:text/html,https://accounts.google.com/ServiceLogin? “ That is very similar to what a legitimate Google Account login screen look like. The login box has even been designed to look just like the actual login box that Google uses.

This phishing scam has actually been making the rounds for the past year or so, and is continuing to trick people to this day. Being savvy about technological risks doesn’t necessarily guarantee that someone will not fall for this scam. Among the people who have reported getting duped, many were people who considered themselves to be “experienced” with today’s technology.

How to Avoid Getting Scammed

Now that you know how dangerous and tricky this phishing scam is, it is time to get prepared to defend yourself from it. The first thing to do is to check any Gmail login screens that pop up and see if they start with data:text. You can also stretch out the address bar to look for blank space that you may not notice at first. At the end of the blank space, you’ll see the file that opens in the new tab. You can also set up your Gmail account to use two-factor authentication for additional authentication security to your account.

Always be safe when going online and don’t assume that email messages necessarily come from people you know and trust. Today’s scammers and hackers have gone to great lengths to create these kinds of scam messages that are able to fool even some of the most experienced and in-the-know technology users.

It may finally be the end for the CFPB Consumer Complaint Database

There was a lot of fan fair related to the creation and release of the Consumer Financial Protection Bureau’s ‘Consumer Complaint Database’ not all that long ago. It looks like the database may soon become nothing more than a memory. Republicans have launched an effort to get rid of the often-maligned database, and it may very well walk off into the sunset before it reaches much more than its one-millionth consumer complaint.

Recently, a memo was sent from the House financial Services Committee Chairman, Jeb Hensarling. The memo mapped out plans to begin a new version of the Financial CHOICE Act. The proposed name appears to be CHOICE Act 2.0. This revised act may lead to the Consumer Financial Protection Bureau dealing with some pretty major changes in the not-too-distant future.

In addition to a major shakeup for the core leadership of the CFPB, a big change that was mentioned in the memo has to do with repealing the consumer complaint database. The database was put into place as part of Dodd-Frank and has been known was a key portion of the work the CFPB does.

A lot of scrutiny has been leveled against the database ever since the CFPB made an announcement about wanting to make the consumer complaints received available as public data. Many of the companies that were mentioned in the database, along with other industry experts, took issue with the fact that many times the consumer complaints that were submitted to the database were not proven or even verified.

One organization that had a lot to say about the database is the National Association of Federally-Insured Credit Unions. Andrew Morris, Regulatory Affairs Counsel, said, “NAFCU supports consumer protection but we have always maintained that the CFPB consumer complaint database is a flawed tool that poses significant reputational risk for financial institutions.”

Morris went on to say, “As a sleek, agency-branded platform, the database gives a false impression that the CFPB has investigated complaints and determined that they are true. However, this is not the case, and the CFPB regularly publishes complaints that are not fully verified. Unfortunately, there is no process in place to assure that consumer complaints are fully vetted, and without an extra level of due diligence the database frequently operates as showcase for subjective criticism.”

Morris explained how credit unions have strong relationships with members and that they already offer lots of policies to help resolve consumer complaints, while obtaining feedback from members at the same time. He said, “In short, NAFCU supports the resolution of disputes and investigation of valid and verified complaints, but the reputational risk posed by unverified complaints is a major concern and one not easily remedied.”

In August of 2016, the CFPB announced that it wanted to put a small survey into the closing portion of the complaint database. This proposal would allow consumers to give feedback about how companies handle complaints. The CFPB indicated that it would use the feedback received to enforce supervision on companies, to write more efficient rules and to monitor the financial product and services market place.

The CFPB, however, may not have a very good chance of keeping their database in place for much longer. Representative Matt Salmon recently introduced a bill called the CFPB Data Accountability Act. According to Salmon, “My bill would improve the current database by requiring the CFPB to verify the facts of each complaint and present this information in an aggregated format so that consumers have better access to CFPB-collected data and can make better decisions about their financial futures.”

Major Personnel Changes at CFPB Prior to Trump Inauguration

Anyone who knows even a little about the Consumer Financial Protection Bureau (CFPB) is aware that this government watchdog group would not be in existence if it were not for liberal democrat representatives. With the historic election of Donald Trump as the new President of the United States, along with key Republican victories all over the country, many people expected to see major changes with regards to how the CFPB does business. The nation didn’t even have to wait for Trump to officially take charge before some major shakeups happened that have a major impact on the leadership structure of the CFPB.

About two weeks before Mr. Trump’s inauguration, the CFPB released information related to some big changes for the leadership of the Bureau.

Here is what Richard Cordray, the CFPB Director had to say on the subject, ““I am very excited for the new additions we are announcing today to the Bureau’s senior leadership. The mix of experience and talent this group brings will provide great value to the Bureau as we continue to work on behalf of consumers everywhere.”

Here are some of the key changes that have been made thus far:

  • Leandra English appears to be returning as the Chief of Staff.
  • Jerry Horton will fill the role of Chief Information Officer.
  • Paul Kantwill is going to be the Assistant Director for Servicemember Affairs.
  • John McNamara will be the Assistant Director of Consumer Lending, Reporting and Collections.
  • Elizabeth Reilly will round out the changed leadership structure as the Chief Financial Oficer.

The changes to the leadership lineup is happening at the same time that the CFPB, itself, faces a potentially rocky future under the Trump administration. The CFPB has been around for five years and is likely to face some obstacles very soon. Elected officials on the right have long shown interest in completely overhauling Dodd-Frank; the impetus behind the CFPB. In addition to pressure from the right, the CFPB has also been facing some legal fights, like the D.C. Circuit’s U.S. Court of Appeals ruling that the CFPB’s governance powers are “unconstitutional.”

There are a lot of “consumer advocate groups” and “public interest organizations” that continue to support the CFPB. These groups have indicated that they plan to keep on pushing to back up both the CFPB and Richard Cordray. Some folks would like to see Cordray ousted before his term is up, which takes place in mid-2018. Supporters have indicated that they would like to see him complete this term. Other heads of the agency, however, have indicated that they plan to walk away from their positions.

From the very beginning, the CFPB has been a lightning rod for controversy. GOP lawmakers have said many times that the Consumer Financial Protection Bureau simply wields too much authority and power. Republican leaders have long expressed interest in adding a bipartisan commission to change the way that the CFPB goes about living up to its responsibilities. They would also like to see the CFPB’s budget to get approval from Congress, while putting a veto option for the bureau in place.

We have already seen that the Trump administration is taking serious actions to strip away some of the unnecessary regulations that have been choking out small businesses in the United States. Perhaps we will finally see the CFPB turned into something that will actually help consumers, or done away with completely in an effort to help reduce the intrusive form of regulation that the Consumer Financial Protection Bureau has been well known for implementing and enforcing over the past five years.

Limiting Loan Options in Louisiana had Negative Impact on Borrowers

Limiting Loan Options in Louisiana had Negative Impact on Borrowers

There are a lot of groups in the United States that say they are doing everything they can to “look out for” and “protect” the people of this country. These groups are often known as “consumer advocate” groups. And while there are some good consumer advocates in the US, there are also some groups that think the average consumer is ignorant and that the government must assist the advocate groups in protecting these folks from their own decisions.

In Baton Rouge, Louisiana there are a few of these groups who think that people who have to take out short term loans once in a while need the help of the government with regards to managing their household financial decisions. Research has shown that the majority of short term credit customers actually take time to consider their options prior to taking out loans. It has also been proven that most customers who utilize short term lending services are satisfied with their experiences. This hasn’t stopped Senate Bill 84, though, which will lead to restrictions on the total number of payday loans a person can take out.

The folks behind this bill say that it is meant to provide financial protection to consumers. In reality, though, the bill takes away a financial service option that thousands of people regularly use. Payday loans are often the most affordable and simple to get financial products for people who are facing short term financial issues. When this option is taking away, households that face temporary cash shortages may not be able to take care of emergency expenses, pay their bills, or they may just be forced to seek out higher-risk methods of getting their hands on emergency cash.

When a consumer is limited in how many times they can get access to a line of credit, that amounts to the government slapping your hand if they believe you are going to the well once too often. Payday loan customers use the money they get from these loans to take care of unexpected financial issues. There is not a person out there who can see to the future to know how many times they might have financial emergencies over the next year. Why, then, does the government think that putting a limit on the number of times someone can take out a short term loan is a good idea?

Some states have banned payday lending completely. The consumers in those states still have financial emergencies from time-to-time. However, they now have fewer financial options to deal with emergency expenses. After payday loans were banned in Georgia and North Carolina, it turned out that more people ended up overdrafting their bank accounts. Additionally, consumers in the state filed more complaints about lenders and debt collection agencies. The payday loan ban has even led to more Chapter 7 Bankruptcy filings in both states. Do the Louisiana lawmakers think that they can avoid the negative results that other states have seen when payday loans have been banned or over-regulated?

The fact of the matter is that payday loans are simply one financial option that the people of Louisiana have; and a popular option at that. Consumer advocate groups and lawmakers can say all that they want about protecting and serving consumers in the financial marketplace. The fact of the matter is that when protection amounts to viable options being taken away or limited, then that is not the kind of protection that most people are looking for. Regulations are good when they actually protect consumers, but extremely bad when they take freedom of choice away from people. It’s about time leaders in Louisiana and the entire country begin to recognize this.

Payday Loans: Debunking the Myth of Inflated APR Charges

Make no mistake about it – payday loans are no longer just loans for consumers to take out if they need access to fast money. These types of loans have quickly become political cannon fodder for government agencies, elected individuals and consumer watchdog groups. And as we all know very well, when something becomes politicized, people will say just about anything to get their way. The opponents of payday lending know that they can easily make accusations against the industry that tugs on the heartstrings of people around the country, and that by doing so they will further their political agenda.

One of the most heinous lies that gets passed around and picked up these days is the mistruth about payday lenders charging sky-high APR fees. You can look on the Internet and easily find dozens of articles where the charges are made that payday lenders charge 300 percent, 500 percent or even 800 percent APR. Those numbers are crazy-high, and it is easy to understand why people might think that if payday lenders are charging those kinds of APR fees that they are taking advantage of American consumers.

Here is the thing, though… Payday loans are one of the only forms of loans in this country that don’t ACTUALLY accrue APR. The mainstream journalists, consumer advocate groups and government agencies don’t what you to know that. They insist on spreading the obscene APR lie, and people seem to eat it up like candy. Payday lenders charge FLAT RATE FEES. What does this mean? It means that if someone takes out a loan, they pay a certain amount of money (in the form of a loan fee) plus the amount of money that they borrowed.

A lender might charge $15 for a $100 loan. The two weeks of the loan term goes by and the borrower pays the lender back $115. Seems easy enough to understand, right? No annual percentage rate was involved with this loan. The $15 fee did not accrue any interest; it remained the same flat rate that the borrower agreed to pay when he/she took out the $100 loan. So how are the opponents of payday lending able to get away with their outrageous claims?

It is simply a bit of book cooking that these folks are up to. They take the $15 fee and apply it to an absolutely worst-case-scenario type of situation. They suppose that the borrower just doesn’t pay the loan back on time, and rolls the entire amount over into a new loan, with an additional loan fee. So now that $100 loan would cost the borrower even more. Then they keep extrapolating the original loan out over the course of an entire year. That’s how they come up with those scary headlines about payday lenders charging super-high APR fees.

The math just doesn’t work out like that in the real world, folks. Sure, there are some people who are unable/unwilling to pay back their loans on the original due date. Some of them roll their loans over into new loans. The majority of borrowers, however, pay back their loan on time. There is no year-long journey of interest building up like crazy on these loans. The borrowers pay them back, and get back to business as normal. And the people that do roll loans over usually do so with paying the loan back as quickly as possible in mind. No one tries to see how long they can go without paying, as that would be crazy and super expensive.

Yes, some people wind up not paying at all too. The same way people decide not to make credit card payments or other types of loan payments. But those are outliers and by no means reflective of the vast majority of American consumers. Just as the people who don’t pay back their payday loans in a timely manner are exceptions and not the rule. Most folks pay their loans back on time, they pay the original flat rate loan fee and that is the end of the story. But that is a story the CFPB and other watchdog groups don’t want you to hear.

Payday Lending Opponents Simply Do Not Seem to Understand the Industry

There are several consumer advocacy and community groups out there who have been very vocal about their dislike of the payday lending industry. A chief complaint that many of these groups like to bring up is that they believe the lenders charge super-high interest rates. Here’s an example of that thought process: If someone takes out a payday loan and pays $15 or so for every $100 that they borrow for a period of about 2 weeks, then the borrower is paying too much. These folks like to stretch out the $15 fee for each hundred borrowed across an entire year. Borrowers do sometimes roll loans over into new loans, and that leads to higher fees. But are the loan fees really that outrageous to begin with?

What if you ran a payday lending company? Well, for starters you would know that lending involves a certain level of potential risk. There is an increased risk that goes hand-in-hand with making loans to people with lower credit scores and income levels. Banks and credit card companies do everything that they can to minimize risk. That is why these industries don’t offer shorter term loans to people with bad credit. Payday lenders assume a huge amount of risk, and that is one of the reasons that they fees they charge might seem a little too much to folks who don’t understand the lending/risk equation.

It is true that using a short term loan to deal with daily expenses or emergency expenses is not a great situation to be in. However, the opponents of payday lending simply don’t realize that the lenders provide an important, much-needed service to lots of American consumers every year. The alternatives to payday loans (i.e. potentially turning to a loan shark or other illegal lender) are much worse than any payday loan could ever be.

While people from various walks of life take out payday loans, the average payday loan customer is likely to have a subprime credit score. This leaves them with fewer borrowing options than someone with normal or good credit. Banks, credit unions and credit card companies realize that these types of borrowers present a higher risk, and they will not lend money to these people. The fact of the matter is that these types of borrowers are more likely to default on their loans. These same consumers regularly default on their payday loans, but the lenders in this industry continue to take that risk, and they have to charge loan fees to get compensated for the risk that they take on with each loan that is made.

Higher risk borrowers are more likely to pay higher loan/APR fees. People with great credit scores/histories are more likely to score low APR fees. It is really that simple. If you look at payday loan fees in light of this basic information, it is hard to consider these lenders as being predatory in the least. If you were going to lend someone money, and you knew that they were not likely to pay you back, would you still do it? Probably not, but payday lenders do that every day!

It is easy to get passionate about these types of topics. No one wants to see lower income consumers having to pay expensive fees to borrow money. However, we need to consider how much worse-off these people would be without the ability to take out small dollar/short term loans. If the watchdog groups get their way, lower income Americans with bad credit scores may have a very rough financial road ahead to face before too long.

Payday Lenders Increase Efforts to Rally Support from Consumers

Imagine owning a business and finding out that a group was working hard to undermine all of your efforts and to potentially force you out of business. Or, imagine being someone who has had a steady job for years, and you learned that you might lose that job in the near future. Finally, visualize being a consumer (all of us are, after all) and finding out that the government believes an industry you frequently patronize is “bad for you” and that they plan on introducing new rules that would limit your choices in a particular market.

These three scenarios aren’t all that far-fetched. As a matter of fact, they are all three taking place right now. The Consumer Financial Protection Bureau (CFPB) is the government agency that is currently throwing all of its considerable power behind a plan to over-regulate the payday lending industry to the point of extinction. This government agency has created a new rule that may force payday lenders to lose their businesses, employees of payday lending stores to lose their jobs and consumers to go without a viable choice for short term credit products.

If you stood to be threatened the way these folks are, wouldn’t you raise your voice to do something about the situation at hand? Probably. It looks like people who work in the payday lending industry are finally getting tired of the government threatening to take away their livelihoods. They are banding together and rallying their customers to help them out. Payday lending companies are providing Internet links to websites run by industry trade groups to let people voice their opinions about the proposed regulations that the CFPB recently revealed to the world.

Speedy Cash is a well-known payday lending company. On their website they tell visitors, “Tell policymakers in Washington, D.C.: Don’t Take My Credit Away.” The company website has a link from this warning to a site called CreditStrengthensCommunities.com. This website allows consumers to sign a letter that will be sent directly to the CFPB. The website is apparently run by the Community Financial Services Association of America, which is a trade group that represents payday lending companies.

It’s not like the CFPB didn’t ask for it. When the Bureau introduced its proposed payday loan rule – which adds up to a whopping 1,300 pages – they asked the public to chime in with their take on the new regulations. As of the time of this writing, about 57,000 comments have been posted. All of the details of the new rule and public comments on it can be found at regulations.gov. Right now, that proposed payday lending rules are trending on this government-run website.

The folks who run credit unions believe that they should be exempt from the new rules. Some credit unions provide short term loans that are very similar to payday loans. Instead of trying to make the rule not apply to their industry, the credit unions should be doing what they can to help put a stop to the new rule, the way that payday lending companies currently are. Of course, most credit union executives would probably love to see the payday lending industry leveled, so no one in the payday lending industry is holding their breath waiting for this to happen.

According to a trade group called the Financial Service Centers of America, “These new rules will put so many restrictions on products you use, including payday and title loans that you may no longer be able to qualify for a loan.” That is a sobering, scary statement that every American consumer needs to consider.

Payday Lenders begin to turn the Tide against Proposed CFPB Regulations

Payday lenders have been living with the pressure of a very real threat to their industry for some time now. The threat is the new regulations that the CFPB has cooked up for the industry. In the mainstream media and in some court hearings, the payday lenders have taken quite a beating from the CFPB so far. It looks, however, like the lenders have finally had it, and they have started to take action to push back against the CFPB and its proposed payday lending industry regulations.

Jennifer Sons is from Chino Valley Arizona and she is also a payday loan customer. She wrote a note that got delivered to D.C. via a Cincinnati group called Axcess Financial. Part of that note read, “These loans are life savers!! Do not change anything please!”

Another payday loan customer, Kathy Walsh of Shellsburg, Iowa wrote, “If I did not have the advantage of a payday loan, I wouldn’t be able to pay for things like my medicine when I run out, especially since I get paid twice a month!”

There have been so many personal notes and comments posted online that the federal government’s website, Regulations.gov, has them all listed under a section of the site called “What’s trending.” At last count, there were more than 22,500 comments and a minimum of 830 handwritten notes that were sent through via Axcess. This group runs the Check ‘n Go and Allied Cash Advance Locations. An additional 800 comments were posted by customers of Advance Financial in Nashville. Some of these notes had straight-to-the-point text, like “I have bills to pay,” and “Leave me alone!”

The correspondence was recently reviewed and it was determined that the letters were from consumers who were concerned about their access to lines of credit going away. Those types of letters and comments far outweighed the comments from critics of the payday loan industry. The critics, mostly consumer watchdog/advocate groups, believe that the lenders are leading consumers down the wrong path and they say that credit for working class people will not go away. They claim that new financial products will offer people the chance to borrow money with more affordable fees.

Providers in the payday lending industry, however, say that the rule will force legitimate lenders to close down their companies. They also say that the rule will prevent lower income consumers from having access to emergency cash and lines of credit. In this battle the lenders have found that the borrowers are their most powerful weapon.

Cullen Earnest is the VP of public policy for Advance Financial. He said, “This is just the tip of the iceberg!” The last day that the CFPB will accept public comments on the rule is October 7th. Earnest warns that there will be many more consumer letters and comments before that day arrives.

As things now stand in most states, payday lending companies can make shorter term, smaller dollar loans to just about any person who has a job. If borrowers are unable to pay back their loans on time, they can roll the loan over into a new one. Opponents of payday lending say that this process creates cycles of debt for poor people. They hope that the new rules will put an end to the creation of these cycles. It is important to know, however, that most people who take out payday loans do so with understanding of the fees and the loan terms. They also usually pay back their loans on time. Those who roll loans over often do so willingly, and fully understanding that it will take them additional time to pay the loans back. This is no different than if someone chooses to skip a credit card payment; except that the CFPB would rather target the payday lending industry with stiff regulations than it would larger providers of financial services, like big banks and credit card companies.

Consumer Financial Protection Bureau Rule may cause trouble for Credit Unions and Small Banks

 

The Consumer Financial Protection Bureau has done a bang-up job of staying in the spotlight in recent years. From its participation in the ill-conceived ‘Operation Choke Point’ to its recent efforts to put undue pressure on alternative lending companies, the CFPB has been on one heck of a roll. The Bureau has even managed to find itself accused of being unconstitutional, and had its single-director structure questioned by more than a few influential government leaders.

Of course, the CFPB has been in the news most recently because it has finally unveiled its proposed federal rules to police the payday lending industry. Those in charge at the CFPB may say that they are protecting consumers with these rules, but if the rules get enacted as is, they may destroy the smaller dollar, shorter term lending industry. They may also cause some problems for smaller banks and credit unions too.

The new CFPB rules were officially unveiled in June. According to these rules it would be considered an “abusive and unfair practice” for lending companies to provide short term loans to consumers without first making sure that said consumers have the ability to easily repay their loans. Many opponents of payday lending believe that the CFPB needs to implement the new rules in order to protect consumers from “cycles of debt.” It turns out, however, that the new rules may hurt consumers more than anyone has admitted to up until this point in time.

The rules essentially force lending companies to get verifications and to do compliance checks on a couple of different types of loans. Short term loans that can run from 14 to 45 days are one type of loan that could be affected. Another type consists of loans that have annual percentage rates of more than 36 percent and that uses some type of “leveraged payment mechanism”, like using a car title as collateral. These types of financial transactions can include ATM use and loan payments made via deductions from a borrower’s paycheck.

Being as some of these types of transactions are provided by smaller banks and credit unions, it is understandable why some folks in this industry are now in a bit of an uproar. According to the CEO of the Credit Union of New Mexico, Paul Stull, “It’s calling for doing more underwriting, complying with more regulations, increasing the number of forms, and increasing the number of compliance supervisory checks and double checks that go into this.”

The checks that lenders may have to perform include verifying borrowers’ income, debt responsibilities and credit reports. Additionally, lenders may have to find out the cost of housing, basic living expenses and to even project how prepared someone will be to pay back a loan when it comes due. And remember, these types of checks require additional resources; resources that payday lenders, some small banks and credit unions may not necessarily be able to afford.

Smaller financial institutions follow a business model of helping borrowers pay off other loans, but the new rules may cause some of these financial providers from being able to do so. Ironically enough, some of the loans that may be affected are what some credit unions advertise as “payday loan alternatives.” Considering that many operators of small banks and credit unions have tended to be vocal critics of the payday lending industry, it may be a case of karma coming around to bite these financial institutions. The lesson may be that the folks who head up these organizations need to be careful what they wish for. Many of them wished that the payday lending industry would get hard with new rules. Now that the rules may also apply to services provided by credit unions and smaller banks, those folks may start singing a different tune.

So Now Elizabeth Warren Thinks the Post Office should handle your Loans

For some time now the Consumer Financial Protection Bureau (CFPB) has been moving closer and closer to reaching their longtime goal of destroying the payday lending industry. They have revealed their proposed new payday lending rules as the cornerstone of this plan. Some advocates are now saying that all of this will create a path that allows the U.S. Postal Service – of all groups – to slide in and take over as being the chief provider of smaller dollar loans.

Liberals that support the CFPB, like Senator Elizabeth Warren, have been itching to replace the payday lending industry with a government organization for a while. They are now trying to include some points to the Democratic Party platform that would make banking a service line that the U.S. Postal Service is allowed to perform. Back in 2010 the Dodd-Frank Act went into effect and gave the CFPB the power to regulate and police short term providers of credit lines and payday lending. Warren was one of the elected officials responsible for Dodd-Frank, so it’s easy to see why she is involved in this latest move.

Section 1205 of Dodd-Frank allow for smaller dollar loans to be provided via subsidized alternatives that are fueled by taxpayer dollars. Warren has been a longtime supporter of using public services, like the Post Office, to be competitors with private lending companies. The vision she has for the government stepping into the lending industry would pretty much give the Postal Service a valid banking charter. Warren describes it as, “… nothing fancy, just basic bill paying, check cashing and small dollar loans.”

Those who support increased regulations on the industry believe that shorter-term loans, like payday loans actually trap consumers in debt cycles where they are forced to pay sky-high loan fees. However, most payday loans charge very simple fees. As an example, borrowers get charged $15 to take out a 14 day payday loan. This example adds up to an interest charge of just $15. Those who claim payday loans charge insanely high APR fees are simply extrapolating the simple fees over the course of an entire year. That is a great way to get people up in arms about payday loan fees, but it simply doesn’t reflect the reality of what people actually pay

Payday lenders would not be able to run successful businesses if they were always trying to gouge their customer base. There’s no reason for them to do so. Creating loans that consumers are not able to repay would quickly destroy the business, as every lender has a vested interest in making sure their customers are able to repay their loans.

Payday lenders and other short term lending companies fill a very valid role in the financial industry and provide loans for more than 10 million people every year. If people were not getting a good perceived value from these lenders they would simply stop paying for their services. In other words – people understand what they are paying for when they take out payday loans and seem more than content with doing so.

The claim that payday loans cause problems for consumers assumes that people are not able to make informed decisions about how they handle their finances. If we follow this kind of reasoning, we will get to a place where we live in a “consumer protection” state where the government is in total control of every aspect of the financial industry. That’s the last place that this country needs to be!

Warren wants the Postal Service to be your lender. What’s next? Will we see the FCC becoming our cable provider? Those are the kinds of absurd situations that extreme liberal thinkers in our government would love to see take place. Let’s hope common sense rules the day with regards to payday lending and this whole Post Office idea gets shot down in flames.