Online Lenders Fight Regulation (VIDEO)

Payday loan offices were sprouting up in strip malls and on street corners across America for years before Wall Street collapsed last fall - quiet evidence that hard times began hitting working families long ago. Now, more people than ever are using payday loans to keep bill collectors at bay. Quick money (at interest rates of around 500% or more), for people with bad credit has been praised by some as a lifeline for the poor and condemned by others as a cynical trap exploiting families in crisis. Some states have passed laws limiting interest rates, but there is one marketplace that knows no borders -- the Internet.

ANP videographer Lagan Sebert has been tracing the many ways Americans have been ringing up record debt. For this story, Sebert first staked out a conference on Capitol Hill where online payday lenders and lobbyists honed their arguments to Congress against reform; then he traveled to a small town near the Virginia-North Carolina border to learn about the experiences of a man who one day googled "bad credit loans" and soon found himself in more trouble than he bargained for.

Watch:

Illinois senator Dick Durbin's bill, the Protecting Consumers from Unreasonable Credit Rates Act, has been referred to the Senate Banking Committee where it will be up to the man who seems to be everywhere these days, chairman Chris Dodd (D-Conn.), to schedule a time for the committee to review the bill. Durbin's proposal would put a national cap on interest rates at 36%. So far Dodd has not indicated when, if ever, he will call a hearing to consider it.

Comments

[Stinee]

It kills me that the Center for Responsible lending is used a credible source for defending families like the Redfords. The CRL is a decoy lobby to lead consumer groups and politicians off the trail of the fraudulent mortgage banks by steering us towards payday lenders. CRL was founded in part by World Savings, a key player in the wholesale mortgage fraud which has derailed the global economy. The Redfords have it good compared to the victims of the fraud perpetrated by CRL’s founders. At least they still have a home.

[GoldsteinD]

One reason why payday lending has increased is because, for the last year, sub prime credit card issuers have been losing their funding. Now that the credit card industry is being squeezed more by the govt, you can expect payday lending to increase more unless, of course, the govt steps in, again. Unfortunately, this may cause an increase in illegal lending by loan sharks and hoods plus less spending and/or more illegal activities to satiate or incredible consumer appetites.

[PresidentRobertBooth]

The sharks are complaining because the seals are being protected....sorta.

[Kenneth James]

I think Senator Dodd should schedule hearings as soon as possible with the million and one other banking issues. Seems like they were all asleep at the switch. It's not like this issue hasn't received plenty of press. This is an issue both Consumers Union, Move On and Color of Change should gang up on.

[rabiddog6708]

I can't keep up with what's been going on
I think my heart must just be slowing down
Among the human beings in their designer jeans
Am I the only one who hears the screams
And the strangled cries of lawyers in love

God sends his spaceships to America, the beautiful
They land at six o'clock and there we are, the dutiful
Eating from TV trays, tuned into to Happy Days
Waiting for World War III while Jesus slaves
To the mating calls of lawyers in love

Last night I watched the news from Washington, the capitol
The Russians escaped while we weren't watching them, like Russians will
Now we've got all this room, we've even got the moon
And I hear the U.S.S.R. will be open soon
As vacation land for lawyers in love

"Lawyers In Love" - Jackson Browne "Lawyers in Love"

[flatus]

"i think I fear for the dads and moms
who send their sons to the Viet Nams
And feel their way of life has been protected til the next war comes."

"For America" - Jackson Browne