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No necessity in payday loans in Massachusetts

Applying for payday loans by having an unexpected emergency is a common practice in the USA. These loans are short-termed and are given to a borrower in return for his next paycheck. Although interest rates on payday loans reach high figures, they are very popular among middle-class customers, even despite the fact that this credit may be destructive for their family budget.
In Massachusetts payday lending industry is considered to be not legal and lending companies which activities don’t conform to the State law will be seriously punished. Additionally, banks that were used to cooperate with payday lenders from other States now are required to comply with the legislation as well. These new restrictions have been passed in order to protect Massachusetts citizens from unprincipled and usurious activities of unfair payday lenders.
As a result, a new law was enacted on 1st of January, 2010. According to this law the operations of payday lending businesses are eliminated in the whole State of Massachusetts. Such lenders are able to continue providing their services, only if they are corresponding to the Act of Small Loans. Online payday lenders are also required to operate in accordance with the above mentioned act. There are other legislative acts, particularly laws of the Massachusetts Commonwealth, which lenders should pay attention to.
The main legislative acts of Massachusetts which concern payday loans provide the following requirements. Uppermost, operations of payday lending companies as well as operations of similar institutions are prohibited in Massachusetts. Any alliances between out-of-state payday lenders and local banks aren’t allowed either. The State legislators set and control the amount of permissible financial charges and all the lenders are required to keep to them. Under the rules, borrowers are not allowed to be charged more than 23% on one loan. Administrative fees or any additional financial fees are not to exceed $20.
There are a lot of arguments for and against payday loans. But serious drawbacks of this type of credit are the reasons why payday lending industry is banned in Massachusetts. In addition, all employers in the State are required to pay their employees once a week or once two weeks. Due to this, people can constantly receive money and have no necessity in payday loans at all.
Though, not everyone is able to overcome financial difficulties and unexpected emergencies can appear every second. It is quite common that in such situations people are trying to find financial help from credit associations and companies that are widely distributed in America. For that reason the main purpose of Massachusetts authorities is to create a comfortable environment in which borrowers can feel safe and reliable by applying for loans. The prohibition of payday loans will enable to eliminate dishonest lenders from the industry and won’t let them receive high profits at the expense of customers whose problems with finances may become even worse.
Judging by labor laws and employee unions Massachusetts is one of the most prosperous States in the USA, because the State legislators try to protect every citizen without paying attention to his social or financial state. They invent new measures in order to minimize borrowers’ need in payday loans and other types of loans.