Legitimate businesses have been feeling the results of the guaranteed unsecured loan caps on interest rates that was intended to only affect the predators in the industry. Despite the fact that the majority of locally owned businesses were operating ethically, there were plenty that were gouging the consumer with usurious interest rates. Unfortunately, many of the legitimate lenders are being slowly driven out of business as a result.Phyllis Riccadonna, who has operated the Ohio Valley’s first payday loan outlet since 1997, complained that the cap rate of 28% would put the corporation out of business. She claims that this move will cost their business about a dollar per loan and that it was contrary to their thinking. She feels that increasing the amount won’t do there clients any good. Her feeling is that it all comes down to Congress trying to put them out of business, not helping their borrowers.With the housing market reeling the way it has been, company’s like Riccadonna’s have preyed on the consumer by charging interest rates on these guaranteed loans that oftentimes wind up in triple digits. What results is the creation of a vicious cycle for the consumer wherein they get trapped in continual debt.
Related reading: Flexible Mortgages
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