Released: October 13, 2009

‘Unbanked’ no longer ignored

Source: Ylan Mui, Washington Post (Free Registration)

For years, the country’s makeshift network of payday lenders and check cashers has operated with little competition or federal regulation.

But as the financial crisis sparks a new wave of consumer protections, lawmakers and the private sector alike are training their sights on an industry that caters to the most vulnerable of populations: the estimated 40 million households on the margins of the nation’s financial system, with limited, if any, access to banks or credit.

Congress is debating the creation of a Consumer Financial Protection Agency that would provide federal oversight of the industry for the first time. In addition, several bills have been introduced to cap the often-triple-digit interest rates on payday loans, long considered by many one of the industry’s most abusive practices.

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