Saving with Steve, August 29, 2023
Saving With Steve with Steve Sexton
Guest, Lucia Constantine
Episode 145: Center for Responsible Lending
The Save With Steve Show, hosted by Steve Sexton will help you with ins and outs of money. We talk about financial issues that that could be costing you thousands of dollars and keeping you up at night.
We talk about “money”… tax reduction, saving more, how to spending less and get more, 401k’s, risk management, retirement, and everything under the sun that relates to you having a healthier happier relationship with money.
everyone has their own unique views and needs when it comes to financial success if you'd like to leave your financial woes behind and live a life of Financial Freedom you've come to the right place welcome to the saving with Steve show hosted by Steve Sexton the show will help you with the ins and outs of money we talked about financial issues that could be costing you thousands of dollars and keeping you up at night we talked about money tax reduction saving more spending less 401K risk management retirement and everything under the sun that relates to you having a healthier happy relationship with money now here is your host of saving with Steve Steve Sexton<br> somebody pretty much everything under the sun release of you having a happier or healthier relationship with money I want to thank you today again my name is Steve sex and thank you for joining us we just hit over 600,000 listeners here so I'm very thankful for everybody and I appreciate you sharing this with your friends and family with that I just want to kick it off cuz this is a big topic today payday loans in car title loans continue to operate and stayed with Wii cords consumer protections I mean they took away three billion dollars in fees last year from people who don't have a lot of income and I think it's really important that people understand what they're getting into before they do and they also need to understand what's going on with this industry because I think people don't realize it could be paying as much as 100% interest in quite brutal they'd understand what they're getting into so we've got the proper person here we have Lucia Constantine she's a researcher at the center for responsible lending as he focuses on mortgage loan<br> predatory practices she finally worked as a policy analyst for the North Carolina Housing Finance Agency or she perform data analysis and research Genesee & Gaston affordable housing across the United States for use for a better one state. So we're really grateful you're here early see it thanks for being here thanks to you for having me on the show if you want to you can go to the Center for responsible lending there's a wonderful report to their is called the debt trap dries the speed rain paid in car title in her strangely three billion dollars in fees every year is agreed you really want to look into the especially if you're considering one of these types of loans but first I want to have Lucy a kind of breakdown what's going on so with that I'm going to give you the floor Alycia let us know what's going on with this industry research has shown that payday and title lender's drained 3 billion in fees from families that are struggling to make ends meet and the way<br> but they do this is by offering unintentionally harmful product that is a short-term loan at a very high interest rate and the case of car title loans we've seen annual interest rates of up to 300% and at that high interest rate consumers get trapped into a cycle of debt that can cause grave Financial Harms in terms of damage to their credit score overdraft fees on their accounts and inability to meet their other expenses and in the case of car title loans in particular they may stand to lose their car was $1,000 in equity in a car they go and borrow that for my car title lender and they might be paying as much as $3,000 in interest on a contractual agreement<br> is you can go into a storefront or online and the lender will ask you for the title of your car typically you need to own your car free and clear and based on the value of your car they will offer you anywhere between 100 and thousands of dollars that cash comes at a triple-digit interest rate over the course of a year so somewhere around 300% and you typically have 30 days to pay it off<br> if you are someone who's already struggling to make ends meet it can be difficult to pay the interest that accrues on that loan over the course of a month and so the lender will offer you the opportunity to refinance that loan into a new loan where they continue to collect interest and fees this typically happens for car title loans around eight times so at the end of that 8 Time bar word typically owes much much more than the original amount of their loan<br> and if they are unable to pay at that point then the lender have the ability to repossess their car which has a lot of consequences for the bar because we typically rely on our cars to get to work to take our kids to school and to run basic errands like shopping for groceries of car title loans the car gets repossessed you know<br> the Consumer Finance Protection Bureau has found that one in five car title borrowers end up getting their car is repossessed the center for responsible lending has also seen data from the California regulator which is a state where Title Lending is still legal and in that state one and three borrowers have their car repossessed anywhere from twenty to thirty percent of car title lender's are people actually do the loan are actually losing their car has a really harmful and systemic effect especially in the 17 states where title is legal and the center for responsible lending has bound states that Implement of strong rate cap which means they have a law limiting the amount of interest that A lender can charge the 36% have effectively eliminated this predatory practice and have offer<br> and their consumers enhance protection<br> they're typically due in 30 days because of the process of refinancing or re borrowing they can extend for longer than that I'll give you an example of a borrower are in Virginia he originally borrowed $800 and he made partial payments or up to five years and at the end of those five years he had paid up to 16,000 on an $800 loan and faced repossession of the vehicle wow all over $800 when it comes to the payday loans how is the loan issues with that listeners do so if you can help us with that as well. Be great payday loans are a similarly harmful product has title loans they are also short-term loans with really high in<br> payday loans have some similar terms as title loans they are also a short-term loan with a really high interest rate the difference between payday and title loans is in order to get a payday loan you have to present a personal check or access to your bank account and the length of the payday loan typically marriage the paycheck cycle so it will be due and when your paycheck is due<br> and again like title loans payday loans are consistently rolled over and refinanced into a new loan which allows the lender to continue taking fees and interest and so even if you borrowed a small amount initially by the time that the payment is due on a payday loan borrowers typically oh much much more and our research shows that combined title and PayDay lending are draining over three billion in fees from communities across the United States but I'm getting a paycheck so they going to a payday loan place and they say I need $800 or I need have the amount of my paycheck fronted to me in a loan and then is paid off<br> I get paid on their payday right<br> yeah and if they would because of the interest if there's not enough in there to pay that they just roll the loan over to the next one<br> that's right they continually roll it over to perpetuate the cycle of debt and consumers continually owe more and more and more on this loan and in the case of payday loans because the lender has access to your bank account they can start taking money directly from your account so some of the harms associated with payday are increase in overdraft fees from your bank account in extreme cases there can be wage garnishment and of course you incur significant damage to your credit score which prevents you from taking out future loans from a bank<br> more expert advice for having a happier relationship with money still to come on the saving with Steve show<br> don't let your financial woes keep you up at night and prevent you from living a life of Financial and personal freedom hi I'm Steve Sexton host of the saving with Steve show where did he talk about the ins-and-outs of money those financial issues that could be costing me thousands of dollars causing stress keeping you up at night we're going to talk about money tax reduction saving more spending left your investment risk management retirement and everything is so sweet with you having a healthier happy relationship with money soon as you've ever dreamed of living a life of Financial and personal freedom you owe it to yourself and your family to tune in to the saving with Steve show join me Steve section of the saving with Steve show as we talked about everything under the sun when it comes to money to learn more about the show visit saving with Steve. Us that's saving with Steve. Us saving with Steve. Us will see you soon<br> welcome back to the show that is here to help you achieve your financial goals it's the saving with Steve show now here's your host Steve Sexton<br> hey welcome back to the saving with Steve shall we talk about the ins-and-outs of money and you know what I just want to truly thank everybody for sharing this with your friends and family all the replays are available at a meeting with Steve. You asked if you're enjoying the stories of helpful information and insight on saving this to you I encourage you to subscribe to your YouTube channel so you never misses show check out if you were a feeling that you can help radio BBS radio talk radio in New York City a 360 TV MFM 24/7 to empower you to solve problems and live a life of personal financial Freedom if you'd like to see all the behind-the-scenes stuff you can go to our Facebook channel is saving with Steve. Us join the Insiders Club get replays exclusive guess guess the whole shot in with that I want to welcome back Lucia Constantine with the center of responsible lending thinks you're welcome back to the show there was to you<br> what's going on one of the things that was really interesting to me is when I was reading the article is there only a few stayed said of the predatory lending percentage I think you're like New Mexico Illinois and a few others that have passed the cab and you know what what's holding these States from passing the Caps are changing the laws so people don't get hit with predatory lending yeah I think this is a very profitable industry that drains over three billion and fees from our communities each year the center for responsible lending has been working in this space or 20 plus years and we've seen states that are able to implement a strong recap so limiting the interest that lenders can charge the 36% have effectively eliminated predatory practices<br> like payday and Title Lending and we've been able to do that work in large part because of really effective State Partners in many of those States and we continue to work to make sure that all states offer strong consumer protections for their residence is really interesting for a state like California who will protect tenants rights when does predatory lending places like there's a disconnect there's that's why I'm kind of shocked by it and I figured a state like California or New York or someplace like that sing hate people getting hurt why aren't they doing anything. I'm just surprised if their people are having their car or their ability to earn taken away from him that just contributed to that issue as well I mean it's very simplistic of me to say that but that's the reality of it<br> any communities that allow payday and Title Lending it really amplifies some of the harms that people are already struggling with so things you mentioned like an inability to pay for rent and trying to manage their expenses in an environment where the cost of living is increasing with inflation against tougher and tougher okay so here's the big part<br> what do people look for how did people understand the exact pasta it's going to if they're going to listen to Payday Loans when you go into somebody's does a payday loan how do you understand cuz sometimes I'm going to let people go in there and say oh wow I didn't realize I was going to pay this and they don't do it and I'm in a bit there's a long contract is like this and something cuz I need money so I just signed it or do it electronically and they never see it to help people understand this is what you need to do this is what you understand if you're going to find you a payday loan we can understand exactly what it pays out exactly how much you going to pay and how it's going to affect you<br> yeah the types of loans that we are especially concerned about are those that are short-term and have really high annual interest rates so up to 300% annually so often what will happen when someone goes to take out one of these loans is exactly what you described they might be presented with a contract that is really lengthy has really small print and that can be confusing for the average borrower to interpret but lenders including payday and title lenders are required by law to disclose the annual percentage rate which is the cost of borrowing this money over the course of a year<br> and often what they will find is that that is closer to 300% in if the quoted interest rate is lower than that so I would encourage consumers who are taking out loans to really read those contracts closely but know that any type of payday or title loan is harmful to consumers in their communities<br> I don't disagree with that after reading the article so when somebody does the title loan on the car title loan what you said is they either go online or going person and they presented their titles long as it's clear and there's no other loans there and somebody will offer Malone and usually people might have ten thousand $20,000 in equity in their car so they might be offered a fraction of that cuz somebody want something that's worth more than that so again they're going to be getting a contract you're going to get a new lienholder on their car and you know what I understand and you know what if they might show on there that you're getting your new being charged 30% they might say you're really going to get charged 30% on $800 it's no big deal but they don't realize that each and every month so you get to 325% a month<br> is that how it's displayed yeah but I would reiterate that by law the lender has to disclose that annual percentage rate and so I would encourage consumers to really read that contract closely because that will give them a better sense of what they will actually end up paying and I would also add that these products are really designed to be harmful and to trap consumers in a cycle of debt where they continue to accrue interest and fees and so even if you take out a small loan it ends up being a mini many more times than the amount you borrowed and in the case of title in particular you could you stand the risk of losing your car which is really a headache for all of us<br> depend on our cars to get to work and to take our kids to school know if somebody wants to go read the article or start getting involved with the center for responsible lending how do they go about doing that<br> yeah I encourage you to take a look at our website where you can find the report that Steve is talking about and then I worked on that report contains a lot of great information about the harm that payday and title or causing in States across the country we also publish a rate map where you can see some of the annual rates that are charged in each state as well as which states have passed John rake up and then beyond that I encourage consumers to be in touch with their state regulator and state legislators to ensure that their state is providing strong protections for consumers<br> l-leucine what's the website there that people can go to to check that out<br> the website is www.medicaid.la.gov very interesting article you can it's really interesting cuz in my seeing which is California in the average person that has a has had five car title loans if they have one they've had five because they have to at least extend it and that's that's not that the amount of money that somebody's going to pay just over a simple little loan Lucia I want to thank you for joining us today and I appreciate you setting life on us shedding light on this issue and you know what maybe there's another subject next time I would love to have you back<br> thank you Steve it's been great to be on the show<br> appreciate it everybody this is Lucia Constantine with the receipt for the center for responsible lending a stick with a more expert advice for having a happier relationship with money still to come on the saving with Steve show<br> don't let your financial woes keep you up at night and prevent you from living a life of Financial and personal freedom hi I'm Steve Sexton post of the saving with Steve show we're going to be talking about the ins-and-outs of money those financial issues that could be costing me thousands of dollars causing stress keeping you up at night we're going to talk about money tax reduction saving more spending less your investment risk management retirement and everything is so sweet with you having a healthier happy relationship with money soon as you've ever dreamed of living a life of Financial and personal freedom you owe it to yourself and your family to tune in to the saving with Steve show join me Steve sex and out of saving with Steve show as we talked about everything under the sun when it comes to money to learn more about the show visit saving with<br> Steve. Us that saving was Steve. Us saving with Steve. Us will see you soon<br> welcome back to the show that is here to help you achieve your financial goals it's the saving with Steve show now here's your host Steve Sexton talk about the ins-and-outs of money pretty much every sailor is out of the center Lacey you having a happier help her relationship with money now I want to thank you for joining us Jeremy's with your friends and family one of the things that we're seeing here is in your all seen it right now too we saw in June with you got reported in July that inflation was down to 3.3% but what you didn't realize is pretty much everything was up except for fuel oil gas gas through the email your your gas in your pipeline energy those are all down anywhere from 18 to 2636 per cent with Bronte average inflation significant problem is<br> what are the reasons why there was a current is our president did not so nicely record sure the beginning of the year in late last year he dropped 250 million barrels of our strategic oil reserve on the market place so they refine that lower the oil prices great great great and then a couple months back we're talkin you know May June July May May April we had OPEC in Russia said he were going to cut oil production by 2.5 million barrels a day and they've been doing it and you're now seeing that the issues that go along with that you're staying anywhere from 60 70 80 a dollar dollar twenty more a gallon at you're paying for gas today<br> who are relations going back up and since it's going back up you're going to see anything that's related to petroleum energy go up and cause so that means rappers that use for trolling car tires car all those type of things are going to start moving forward and you might not see in july-august you'll might see it in September if things pick up so we're going to see more compression we're also seeing higher interest rates which is going to create more Curve Crush in the economy there's some people have less and less money in the bank because they've been spending it from free penacova the van so we got a lot of things going on there so it's really a good time to start looking at how do we go about eliminating or reducing expenses so we can keep up with inflation now one of the smart ways to do that is look at your food bill for example if you love pre-packaged salads<br> $45 a salad so if you're doing 7:00 sounds a month a week time you know what 30 30 week month you're looking at $150 is okay but if you're buying a head of romaine lettuce or iceberg lettuce or kale or you know we are whatever you like whatever it whatever your sound thing is and buying your dressing in mind some nuts making your own croutons and stuff like that you could reduce that like 60 $70 and how to help your salad Albion up pre-packaged items cost significantly more because your packaging it for you as they're adding additives and make everything work for them so they get the lowest car so you pay more but at the end of the day you could lower your costs there this is a great time to start looking at those sell bills<br> hey you might be with AT&T so I want to sell for there are many terrorists out there that you could reduce your cost have just a great service and still have that Apple phone but you could pay significant last we did that we saved $80 a month you can too when you're going for your electric bill hey you know what I know what's in during the summer but if we have the thermostat a little bit higher or the air conditioning set in the high 70s or 80s and you could save money each and every month when it comes to your cable bill<br> hey you know what there's nothing wrong with just having an internet service and then paying for streaming services you can actually get live TV you know what<br> we cut down our cable cost at buy just getting the local internet service live TV so I get all my channels and then we have two or three streaming sites with paint was $100 less a month so you could do that as well there's many other areas you know what there's nothing wrong with having fun like going to the beach is supposed to the amusement park there's nothing wrong with having group Gourmet groups where everybody brings a piece of the meal their own alcohol you can have a great night out with your friend but it doesn't cost too much does a lot of ways if you're looking to make that budget that didn't exist the money do you have to spend on a monthly basis go farther you just got to look at the different ways I mean it could be as simple as the car if you got two cars in the household<br> one of my clients husband drove a truck he drives 30 miles each day to and from work so we go to 30 back 30 to 60 miles a day with his wife just drives like 10 mi in town in the electric car he's driving the big old truck she goes through two tanks in gas okay so two tanks so if you think it out for that big old truck you're looking at $150 a month just for him to use that truck for his wife she doesn't go through take they switched cars will guess what she still only goes through 11 tank a month but he now goes through 110 C'Mon save almost $75 actually feel a little bit more a lot more than that there's wonderful ways that you can also save on travel if you want to travel as a great book called plan your escape the Opera is Wayne.<br> how to travel the world for less than what it cost to stay at home if you want to start looking at those type of things cuz they can save you money so you can keep living the life you want and have but you don't have to spend as much hate you know what that I want to thank you all for joining us here today I hope you learned something from Lucia Constantine from the center for responsible lending and you would stay safe safe healthy we'll see you next time bye bye thank you for joining us for the saving with Steve show hosted by Steve Sexton to learn more about the show and how to become a guest or sponsor visit saving with Steve. Us that saving with Steve. Us join us again next time as we continue to talk about everything under the sun that relates to you having a healthier happier relationship with money this has been the saving with Steve show hosted by Steve Sexton<br>