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How does PACCA's Proposal Protect Consumers?

Credit is an arrangement for deferred payment in exchange for goods and services. The credit market exists because people (consumers) are willing to pay for the use of someone else’s money (lenders).

Our proposal regulates short-term loans in the credit market and grants unprecedented authority to crack down on deceptive and fraudulent lenders preying on vulnerable consumers.

The bill limits fees and bans rollovers. The tiered system will be set to fit each customer's needs, with a 2 to 4 month, no-cost extended payment plan available at the consumer’s request.

The bill grants new and unprecedented authority for the state to crack down on illegal lenders; increases the penalties for illegal lending; and provides a safe harbor for employees who blow the whistle on illegal lending.

The proposal provides the strong provisions in the various state laws which regulate the short-term lending businesses.

List of Consumer Protections Advocated by PACCA:

  • Limits on Indebtedness, Number of Loans, and Size of Loans
  • Customer Right to Rescind
  • Extended Payment Plan
  • Disclosures and Warnings
  • Debt-Free Requirements
  • Customer Database
  • Credit Counseling & Financial Literacy Funding from Loan Transactions
  • Waiting Period Between Loans
  • Minimum and Maximum Term Limits