DALLAS--If you need some cash, quick, there are plenty of places to get it.
But those payday loans come at a cost: interest rates of up to 400 percent! And if you can't pay off your loan right away, you could end up owing *way* more than you borrowed.
Elliott Clark took out $2,500 in loans when his wife broke her ankle and couldn't work. He ended up owing 50-grand in interest.
"When you`re in a bind, a situation that you can`t get out of, you grasp at straws to keep your head above water to try and survive," Clark said.
Thursday in Kansas City, the Consumer Financial Protection Bureau, or CFPB, rolled out some proposed new rules for payday lenders.
The rules would:
- Require lenders to be sure borrowers have the means to pay off the loan,
- Make it harder for lenders to refinance a loan, and,
- Limit penalty fees.
A trade organization for the payday loan industry says the rules would, "cut off access to credit for millions of Americans... and thousands of lenders, especially small businesses, will be forced to shutter their doors."
People in Dallas and some other areas have an alternative, community loan centers, with lower interest and fees.
"These employees can feel great about taking a loan out because they have 12 months to pay it back and it's coming out of their paycheck before their paycheck even hits their hands," said Paul Randle of the Community Loan Center of Dallas.
"It teaches them financial management," he added.
As far as traditional payday loans, the CFPB is spending the next few months gathering feedback on the new rules before putting them into effect.