As government officials lobby for or work to block the appointment of a new Consumer Financial Protection Bureau director, short term lenders continue to operate with little federal oversight, the Morning Sentinel reports.
Many White House Republicans have decided to block the nomination of former Ohio Attorney General Richard Cordray, or any nominee for that matter, until the CFPB's structure has been changed. Until then, independent short term lenders will still be able to function without the same oversight placed on traditional financial institutions. Without these restrictions, these nontraditional credit lenders can offer smaller loans to people with less-than-stellar credit - individuals who are often turned away from banks and other sources of credit. For these consumers, short term loans offer a fast way to get money to pay bills or other expenses, like emergencies such as car or home repairs that can't wait until the next paycheck. According to the publication, approximately 20 million Americans use short term loans. Annual interest rates often come close to 400 percent, but loans often only last two weeks and are for amounts around $100, meaning fees run around $16.