Google has announced that on July 13, their search engine will ban all ads related to payday loans. These loans often have triple digit interest rates and the search engine company has added them to its list of dangerous products, for which it will not run advertisements.
This announcement comes less than a month before industry experts believe the Consumer Financial Protection Bureau will introduce their new federal guidelines, changing how short-term loans work. The new regulations come after many complaints related to quick-fix loans, together with the fact that there is little consumer protection governing the interest rates that lenders can charge. A three-month period will follow the announcement when interested parties can comment on potential changes before revisions and implementation of the final draft of the regulations.
On June 2, the Bureau in Kansas City will present the potential new regulations at a field hearing. These guidelines will cover payday loans, auto title loans and some types of installment loans.
Many payday lenders believe that consumers, especially millennials, need the alternative financial options that they provide and that the new regulations will damage not only their business but also the market that makes use of their services. Some, such as executives from Advance America, go as far as saying that consumers prefer payday loans to those offered by banks because there are no hidden fees.
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