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Tennessee locales look to rein in payday loans

Most residents are likely aware that credit card debt is a huge problem in the state and nationwide. But, what if someone came to them and told them that there was a card that would charge 460 percent interest? One would think that people would avoid that if it all possible. However, according to consumer groups, that is exactly what it is like when individuals use payday loan businesses.

As our state is one of the birthplaces of payday loans, their lobby has a strong presence in the legislature. And, as regulations are loose, somewhere over 6 percent of adults in Tennessee utilize such loans.

Unfortunately, because of the high interest rates allowed, many people find themselves in financial trouble after using these services. As a result, some cities are looking into regulating payday loan businesses.

The industry maintains that it provides a valuable service that allows people with poor credit to get needed money quickly and more cheaply than incurring overdraft fees, or even credit card interest. It points to the fact that in states with stricter regulations more individuals end up paying such fees, which is more expensive in the end.

In any event, Tennessee consumers need to understand how borrowing and interest rates will affect their ability to keep their debt in check. Whether payday loans or credit card debt, consumers have legal rights. Ultimately, in some cases, bankruptcy may be an option. But, to determine how it will affect their future, residents may wish to consider speaking with an experienced attorney.

Source: Times Free Press, "Chattanooga Mayor's Council on Women wants to rein in payday loans," Dave Flessner, June 6, 2017

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Mark T. Young & Associates
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