Trump Administration rolls back payday loan regulations, could a

Trump Administration rolls back payday loan regulations, could affect low-income families the most

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LUBBOCK, Texas -

From 2012 to 2017, Texans paid $9.2 billion in fees for payday and auto title loans.

Now, the Trump Administration is set to overhaul Obama-era restrictions requiring lenders to verify that borrowers can pay back these loans.

"This industry preys on the most vulnerable," Lubbock City Councilman Juan Chadis (D-1), said. 

Councilman Chadis said removing these regulations will only add fuel to the fire.

"Two extensions was the most you could get," Chadis said. "That has been removed. Now you can get as many extensions as you want, which can lead to financial ruin."

Interest rates on these loans in Texas can go over 500 percent APR, so without these loan limit protections, Chadis said hundreds of thousands will be trapped in debt. 

"The payday loans will give you that extension, plus added fees to that, and every time you go back or you return to get an extension, they keep adding fees to this. It's a spiral. It's devastating to the borrower," he said.

He said he calls these people "predatory lenders" because they prey on low-income families who feel they do not have a better option. 

"I mean, you've got to feed the kids, you've got to pay your utilities, or your mortgage payment or rent payment. Where do you go? This is so convenient because they're not asking you for a credit check. That's something you don't want to do," Chadis said.

Chadis added he strongly urges people to talk to banks, credit unions or family members before taking this kind of loan.
 

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