RANCHO CUCAMONGA, Calif., May 28, 2013 /PRNewswire/ -- Payday loan lending has been under attack from legislators across the country. From California to Rhode Island, officials are working to lower interest rate caps or ban the practice all together. But payday loans haven't always faced today's pro-regulation environment.
loans.org interviewed several historians and finance experts to produce a report detailing the complete history of modern payday loans. The report covers the pre-Depression roots of the industry, the post-1980 "Golden Age" of high interest lending and today's nation-wide regulation crusade.
While the first wave of payday loan lending dates back to the Great Depression, the industry benefited most from the Depository Institutions Deregulation and Monetary control Act of 1980, which allowed financial institutions to charge any interest rate they desired.
In the '90s more companies began lending online. The combination of a strong economy and low regulation made this period a golden age for lenders. It wasn't until 2010, when Congress set up the Consumer Financial Protection Bureau (CFPB) to regulate financial industries, including payday lending, that lenders really faced national scrutiny.
Today, 12 states have made short-term lending unprofitable or banned payday loans altogether, while several other states, including California, Rhode Island and Texas, are working to further restrict the practice. To see a full breakdown of state-by-state payday loan laws, visit http://loans.org/payday/research/state-laws
For a more detailed look at the history of payday lending, please visit http://loans.org/payday/articles/evolution-cash-advance-lending-war
For additional information on payday loans, please visit http://loans.org/payday
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