WASHINGTON (12/10/13)--Sen. Edward Markey (D-Mass.) has requested that the Federal Trade Commission investigate websites operating as "lead generators" for payday lenders.
Markey in a release noted that the lead generator sites collect personal data such as account numbers, social security numbers and routing numbers from consumers and provide that information to predatory lenders, without consumer consent or knowledge. Many consumers provide this information when they seek short-term loans. Once their information is passed on by lead generators, they may receive several unwanted loan offers.
"These business practices raise a number of concerns about what these lead generator websites do with consumers' personal information, whether they store and secure it and whether these websites sell this personal information without consumers' knowledge or consent," Markey said in a letter to FTC Chairwoman Edith Ramirez.
The Consumer Financial Protection Bureau in early November began accepting complaints on payday lenders. The Credit Union National Association praised the move, and maintains the agency should focus more attention on unregulated entities (News Now Nov. 7).
CUNA remains concerned that the agency not over-regulate in this area, and inadvertently put credit union alternatives out of commission for those members who need this service.
Under federal rules, credit unions are allowed to make short-term, small-amount loans with an annual interest rate of no more than 18%, with some exceptions. Under National Credit Union Administration guidelines, federally chartered credit unions are allowed to charge no more than 10 percentage points above the established usury ceiling--currently, the statutory maximum is 28%.
Most credit unions that offer alternatives to conventional payday loans also limit fees, encourage members to open savings accounts and provide financial counseling.