Rules Change for Serving UnBanked<title>
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Change for Serving UnBanked</span></font></span></p>
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<p class="1stparagraph"><span style="font-size:44.0pt;
mso-bidi-font-size:10.0pt;font-family:"Caslon 224 Black";letter-spacing:0pt" class="1stdropcap">T<o:p>
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</span><font face="Verdana" size="2"><span style="letter-spacing: 0pt" class="bodytextfont">he
Federal Reserve Board has revised their commentary to Regulation Z,
commonly called “Truth in Lending.” This new commentary addresses
payday loans (also known as cash advance loans, check advance loans,
post-dated checks loans, and delayed deposit loans) which are becoming
common in check cashing facilities all over the country.<o:p>
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<p class="bodytext"><font face="Verdana" size="2"><span style="letter-spacing:0pt" class="bodytextfont">Basically,
the commentary notes that when these payday loans include an agreement
with the consumer to defer payment, they fall within the definition of
“credit” in Reg. Z. The fed commentary means that the fees charged for
such “loans” are now subject to “finance charge” limits. With
these changes we can expect to see check cashing facilities, which have
enjoyed very high fees to offset very high losses upon start-up, begin
looking for a guarantee solution.<o:p>
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