Tag: Loans

One Small Step

This is a small step in the direction to protect the working poor, who by the way, are the only people who use these service…..about time they stepped up and did a little protection……

Starting Thursday, the state no longer will allow payday-loan operators to set interest rates as high as 460 percent annually. A 10-year-old law that allowed them to charge above the 36 percent annual rate cap imposed on other lenders, such as banks, will expire.

Miller said that to stay in business, many payday lenders likely will offer auto-title loans, which can generate annual returns of up to 204 percent, according to state law. The Center for Responsible Lending said more than 200 payday stores in Arizona have received auto-title loan licenses in the past two years, as it became more apparent payday licensing would end. Some payday lenders also will continue to offer check-cashing services.

Arizona will become the 16th state to impose an interest-rate cap on payday loans, according to the Center for Responsible Lending in Durham, N.C., which tracks payday-loan operations across the country. At least six other states are looking at imposing restrictions.

It is about time that state legislators pay attention to the workings of the social vulture, that make billions off the lives of the working poor.  My state has NOT yet made an attempt to isolate these predators….but I believe it is coming as soon as we flush the toilet known as the Barbour governorship and his massive protection of ALL businesses, even the vultures in the pay day loan scams.

Look Out Main Street!

The government is coming to help.

The Federal Reserve and Treasury Department on Tuesday unveiled a plan to pump $800 billion into the struggling U.S. economy in an attempt to jumpstart lending by banks to consumers and small businesses.

The government hopes that these initiatives will enable more money to flow to consumers in the form of loans than has occurred so far in previous bailout plans.

One program will make $200 billion available from the Federal Reserve Bank of New York to holders of securities backed by consumer debt, such as credit cards, car loans and student loans.

Where is all this money coming from?

The programs from the Federal Reserve and the New York Fed are more than Congress approved in October for a bailout of the nation’s banks and Wall Street firms. The Fed said the money will come from an increase in its reserves — in essence, it is creating new money.

The idea is that by making money available for investors who are interested in buying loans bundled together into securities, it will be easier and more profitable for banks to loan money to consumers and small businesses.

Before the current credit crisis, lenders got the money they needed to extend credit by selling the loans they had already made. But the Treasury Department said the issuance of those securities essentially came to a halt in October.

Read my front page post and my post on demand–I do not think this is the action that will be needed they are just making easy credit easier to obtain.  Wait!  Is that not what put us in this spot today?  Does anyone else see the stupidity in this?

Automakers May Get Loans

Backers of a program that would lend up to $25 billion to automakers and auto parts suppliers said today they had garnered 71 U.S. House members to support their search for $3.75 billion in funding over the next couple of months.

The program, known as the Advanced Technology Vehicles Manufacturing Incentive Program, was meant to help automakers meet fuel economy standards of 35 miles per gallon by 2020. Created but not funded by Congress last year, the program would provide low-cost loans to cash-strapped automakers and their suppliers for engineering fuel-efficient vehicles or converting old plants.

The $3.75 billion would cover the government’s borrowing costs for up to $25 billion in loans, along with a small reserve for defaults.

While House and Senate Democrats have raised the idea of a second economic stimulus plan — the most likely carrier for such a proposal — the Bush administration has opposed it so far, and the prospects are murky. Congress won’t consider any such plan before leaving for August recess this week, and with no plans to convene after the election, the plan would need to be passed sometime in September.

My reaction is why?  These companies were aware of the coming crisis but yet did nothing to avoid it.  Their answer has been to fire or layoff workers.  I say screw them!