Sep 25, 2013 Sean Albert
In the past month or so, short term lending has come under fire. In New York, state lawmakers have taken steps to attempt to curb the influence of online lenders in the area, despite the fact that they have no authority to do so. While storefront lenders are outlawed in the Empire State, that ban does not extend to online lenders that operate out of Native American reservations, because they are regulated by the federal government.
The onslaught by administrators and the subsequent backlash have caught the attention of a lot of media outlets. However, this is not the only instance of government leaders banning short term lending and adversely affecting consumers.
Long Beach, Calif., City Council takes action on short term lending
According to The Press-Telegram, members of the City Council in Long Beach, Calif., recently voted to place a number of restrictions on the alternative finance sector.
For instance, the newspaper detailed that the local leaders decided to not allow these companies to operate within neighborhood areas and designated that no two lenders can be less than 1,000 feet from each other.
The news source reported that not all individuals in the area are against the industry having a presence. After all, it was these types of businesses that provided relief when traditional banks and lenders wouldn't open their doors to anyone who wasn't a sure thing, credit-wise.
Specifically, the Press-Telegram noted that citizens and a number of consumer groups, including Advance America, are speaking out about the situation.
What to do now?
When companies in the industry are being threatened unjustly, peers have to unite and rise up as they are doing in New York. After all, they have a responsibility to consumers who may not have access to alternative finance otherwise.
There are a number of resources that parties within the sector can use if they want to fight for their rights. For instance, they can go to the Consumer Financial Protection Bureau or even to the courts, as lenders in New York have done to stand up for their cause. Another thing leaders in the field can do is encourage their clients to remain knowledgeable about the various terms that apply to borrowing - this way, when local lawmakers claim that individuals don't know enough about the sector to make informed choices, people can be sure to prove them wrong.