President Obama wants more watch dogs. The financial community does not agree. The agency would oversee just about every available consumer financial product, from payday loans and credit cards to loans from banks and nonbank mortgage lenders.
Answer this much, “How effective is the SEC?” Hello Bernie Madoff. We don’t need another straw man.
Anyway, there is some good banter on this proposed agency here.
“President Barack Obama asked Congress on Tuesday to create a new agency to police the fine print on credit card bills and mortgage documents and determine what fees, penalties and interest rates are fair.”
Unlike mortgages and credit cards, I think payday loans are very straight forward. If you have not figured out that rolling over a payday loan more than 3 times is a really bad idea, then payday loans are not your biggest problem.
Now, I believe the payday loan industry should provide complete disclosure. For the most part, I believe it does. For example, it’s common for the promissory note to display:
CUSTOMER NOTE: Payday advances should be used for short term financial needs only, not as a long term financial solution. Customers with credit difficulties should seek credit counseling.
OR
YOU CANNOT BE PROSECUTED IN CRIMINAL COURT TO COLLECT THIS LOAN.
Everyone should read this article in the Associated Press titled “Administration sends Congress consumer legislation.“