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WASHINGTON (AP) - Under pressure from lawmakers and consumer groups, the payday lending industry on Wednesday announced changes to educate borrowers and help customers who have trouble making payments on short-term loans.
Consumer advocates called the move a public relations gimmick aimed at discouraging state legislatures and Congress from limiting the annual interest rates on payday loans, which can exceed 400 percent.
Payday lenders offer quick cash advances — for a fee — that customers must repay once they receive their next paycheck. Borrowers who cannot repay the loan by the next payday often "roll over" the loan repeatedly, leading to more charges that can quickly add up and lead to a cycle of debt.
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