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Elimination of payday loans in Maine

It is not surprising that there is a great demand for payday loans in America now. People face with numerous cases when they are short of money and no credit institution can provide them with it. Here payday lending firms come to a help. But payday loans have a significant drawback. They are very expensive. Due to the fact that this type of credit is given for a short term, lenders set rather high percentage rates in order to make some profit. That’s why the financial situation of payday borrowers becomes even worse and they can be involved in the debt circle. In order to protect citizens, legislators of some States in their turn passed lending laws which ban payday loans statewide.
Me. Rev. Stat. Ann. tit 9-A §1-301 and Me. Rev. Stat. Ann. tit 9-A §1-201 are two legislative acts that regulate payday lenders and their activities in Maine.
In accordance with this laws payday loans are illegal in the State and are very difficult to get. The legislation imposes strict limitations on payday lending operations due to which payday lending business have become unprofitable. Under the law it is required to charge not more than a $5 fee for a loan not exceeding $75; $15 fee for a loan ranging from $75 to $250; and $25 fee for a loan making up more than $250. These financial fees are relatively low and prevent borrowers from defaulting on payments.
It is forbidden to accept post-dated paychecks from borrowers in Maine. But it is the exact operation that payday lenders are engaged in. The majority of such companies lend money in exchange for a paycheck. In Maine the new regulations have eliminated the activities of payday lending companies and secure customers against paying high interest rates and charges and a possibility of losing their bank accounts.
But the legislation is not able to reach online payday lenders sometimes. Legislators face with difficulties while controlling internet lenders, as they don’t accept post-dated paychecks, but work with a borrower’s check account. For that reason many lending businesses are involved in illegal activities. The State authorities recommend all the residents not to cooperate with online lenders, as they can lose a lot of money and have even bigger financial problems than they had before