Payday loans, pawn shops, rent-to-own companies…these are all examples of “non-bank financial services.”
Non-bank financial services are those used by people who can’t get bank accounts at regular banks. And they hurt people who can least afford to be hurt because such services are more expensive and have higher interest rates for loans than banks do. They’re also unregulated or less regulated and tend to have a reputation for preying on vulnerable consumers.
This topic was addressed in a recent Washington Post column by personal finance columnist Michelle Singletary titled “An attemp to open banks’ doors to all.” The problem is also one recognized by the FDIC, which recently conducted a study showing that 17 million Americans are “unbanked” (i.e., they don’t have a bank). And 43 million Americans are “underbanked.”
A potential solution being pursued by the FDIC and discussed in the column is to work with banks to come up with more creative solutions for providing basic banking services to people who would otherwise be unable to afford them. This is being done under the Community Reinvestment Act of 1977.
If they are able to come up with a workable solution, this could potentially do a great deal to help reduce bankruptcy filings in Las Vegas and everywhere else in the U.S. The reason? Because fewer consumers would fall into the debt traps of payday loans, rent-to-own and other expensive and dangerous ways to borrow money.
Americans really need more thoughtful and creative solutions along these lines. Right now we have the 2005 Bankruptcy Law (BAPCPA) which was an attempt by the credit industry to reduce the number of bankruptcy filings by simply sweeping the problem under the rug. This doesn’t make the problem go away. It just makes it someone else’s problem, namely average Americans, not to mention the economy as a whole.
If you have financial problems, are seeking payday loan debt help or if you need good bankruptcy attorneys in Las Vegas to help you dig out from your debt, please contact us for a free initial consultation.
Haines & Krieger attorneys will answer all of your questions and help you get back on your financial feet!