A Rare 'Payday Lending' Case Sheds Light On A Mysterious Multibillion-Dollar Industry

[xchrom]

http://www.businessinsider.com/states-struggling-to-regulate-vicious-cycle-of-payday-lending-2014-8



New York State prosecutors have indicted three executives for allegedly far exceeding the state's limits on interest rates on short-term loans, through so-called payday loans that are often poorly regulated, reports The New York Times.

The rare case highlights the risk customers can face from payday loans that can lead them to dire financial straits. It also sheds light on a multibillion-dollar industry that has rarely been the subject of criminal actions, The Times points out.

Payday loans are typically for less than $500 and due on the borrower's next payday, according to the Consumer Financial Protection Bureau. The loan's finance charge could range from $10 to $30 per $100 borrowed, with a typical two-week loan amounting to an annual percentage rate (APR) of nearly 400%, compared to 12% to 30% for credit cards.

Carey Vaughn Brown allegedly owned a dozen companies throughout the U.S. and overseas to try to dodge American authorities while controlling all parts of an exploitative loan process, including extending loans with exorbitant interest rates between 350% and 650% and collecting automatic payments from borrowers' bank accounts.



Read more: http://www.businessinsider.com/states-struggling-to-regulate-vicious-cycle-of-payday-lending-2014-8#ixzz3AFxQ1sIy

[IronLionZion]

1. Video:

http://www.democraticunderground.com/1017208933

[xchrom]

2. +1

[marmar]

3. K/R

[littlewolf]

4. did the Mafia train em ?

I am not sure the Mafia had interest rates that high...