Payday loan advances may become legal - WALB.com, South Georgia News, Weather, Sports

Payday loan advances may become legal

January 26, 2007

Albany -- The rules protecting you from predatory lenders may change. Georgia lawmakers will revisit a law that bans payday lending. There's a proposal instead to regulate short-term lenders.

Before payday loan advances were made illegal, all a person had to do was bring an old work pay stub or a post-dated personal check to one of the lenders. They could then walk out of the lending office with cash in hand. But it had to be paid back quickly before huge interest rates and fees kicked in.

"All these fees although they seem small, as they accumulate over the course of a person's effort to try to retrieve that check or to redeem the loan, they you wind up paying more over the course of time," said ADA Gregory Edwards.

Chief Assistant District Attorney Gregory Edwards says the lenders often preyed upon people who couldn't get a more traditional loan. Now state representatives want to bring payday lending back. The proposal would prohibit the cash advance loans from accruing interest, instead adding a late fee. There are also limits to the amount a customer can borrow.

Edwards says borrowers need to beware of fast cash loans.

"I would advise others to look at all their other options before they get involved in a payday lending situation," said Edwards.

"Consumer advocate groups have been involved with these processes and have brought in banks and most of the banks have made the respresentation that you can develop credit and get loans that you need with traditional interest rates."

Consumer advocates say beware payday loans if they're made legal again, because there will be fees to pay, even though lawmakers say there will be no interest on the loans.

The payday loan law was passed after military commanders claimed their young soldiers and families were falling victim to the short-term, high-interest loans.

Feedback: news@walb.com/subject=PaydayLoansLaw/NJ

 

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