The Role of Short-Term Lending Companies
You may have seen in the news that the Consumer Financial Protection Bureau (CFPB) has considered new rules that would impact the way short-term lending companies help people make ends meet in trying financial times.You can read the full proposal here, but here are the key changes that would impact you:
- You can have an active loan for 90 days in one calendar year.
- After you pay off a loan, you have to wait 60 days to open a new one.
These rules would apply not only to payday loans, but also to car title loans and other installment loans. While we understand and appreciate that the intent behind the proposal is to protect consumers, our concern is that these changes would actually revoke your financial freedom.Let’s take a look at how short-term loans are actually used. Did you know that:
- More than 12 million Americans rely on short-term loans each year?
- The average borrower takes out 8 loans per year, and loans are open, on average, for just 18 days?
- People use short-term loans to pay for unexpected expenses as well as recurring, ordinary living expenses?
In other words, even if you are among the millions of people who responsibly use short-term loans, you may not be able to take out a new loan when you need it! Can’t pay rent this month? Need some cash for those unexpected auto repairs? Accidently overdraw your checking account? If changes like those in the CFPB proposal become reality, short terms loans from companies like CashMax Ohio will become increasingly difficult to get for these types of events.
Perception is not Reality
Look, we get it. Our industry has a perception problem. We’ve been called everything from a scam to a debt trap to predatory lenders. But perception isn’t always reality. And when it comes to our industry, the reality is that payday loans, cash advances, and auto title loans help millions of people make ends meet every year. That’s a role we’re happy to play.
If you are currently a CashMax customer (or have ever used a short-term lending company), we thank you for the support. If you’re considering short-term lending company, feel free to call the CashMax location nearest you to learn more about how we can help.