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Kentucky Payday Loans - Kentucky's new payday lender database & what it means to the consumer

Kentucky State Map
Kentucky State Map
Since its inception there have always been questions looming around the cash advance or payday loan industry; information has been put out by various different sources from time to time relating their opinions and theories on what is good and bad about the industry. Tons of reports have shown that consumers have been taken advantage of by very high interest rates that come attached to some of these cash advance loans, and many of us have heard stories circulating through the rumor mill that would have us believe that payday loans are simply another way for giant corporations to take advantage of us, the small defenseless consumer. So what does one do to get to the bottom of the story and find out for himself exactly what the truth is and how it will best serve our individual circumstances? As an old television show's catchphrase used to say "the truth is out there," you just have to know where to look.

To clear up and assist the consumer with better understanding and stronger protection, the state of Kentucky has now instituted new measures that will put stronger regulations and requirements on payday loan services. It has been rumored that these services charge exorbitant amounts of interest in the to unsuspecting and wary consumers. In order to clear up misconceptions and misunderstandings, the state has imposed House Bill 444, the brainchild of State Representative Johnny Bell, which calls for the development of a database that will enhance the capabilities of the state to better monitor payday loan services and track the lending activity of each company. According to state insiders, this new piece of legislation is expected to decrease the annual number of Kentucky payday loans by up to 30%. This reduction in loans is seen as a good thing, not because payday loans are a dirty and despicable creature, but because a reduction in that range is expected to ferret out some of the less desirable companies. It is estimated that 25 to 30% of the companies that have been providing cash advance services and the states are doing so outside of what we would consider to be the moral high ground; these companies have been charging exorbitant interest rates and pursuing borrowers in very unfriendly and unnecessary matters and tactics. Weeding out the chaff, as it were, will subtract from the overall industry activity, but these particular factions of the industry can definitely be done without. By illuminating these companies, the state can get down to business with more reputable providers of Kentucky payday loans, who are willing and able to operate within the confines of the laws that protect the consumer and provide them with guidance to a more legitimized and successful industry overall.

Kentucky State Flag
Kentucky State Flag
Gov. Steve Beshear has praised Rep. Bell and his team for their outstanding work on this recent legislation, but the governor has stopped short of allowing some of the measures that the Representative would like to have added into law. Gov. Beshear has made it very clear that a legitimate Kentucky payday loans service should not have all of the limitations imposed on it that certain politicians would like to see; one such measure would have cash advance services facing a moratorium of roughly 10 years. This moratorium would deny entry into the Kentucky payday loans industry to new companies for the entire time of the moratorium; thus blocking out all competition to current services. The governor has made it quite clear, in an opinion released by his office, that while he is adamant about consumer protection, this piece of legislature is likely to be unconstitutional in its nature, and subject to cost the state in terms of lawsuits and perhaps even lost tax revenue. Limiting the ability of reputable companies to enter into the market is tantamount to limiting the number of grocery stores that can be built in one city; by limiting competition, you give a handful of operators power to dictate pricing and terms. At its root, this is often called monopolization, and unfair business practice, and a very losing proposal for consumers at large.

Kentucky payday loans
Kentucky payday loans
While the Governor firmly believes that the state should take every precaution in order to provide safety and security to its citizens, he also believes that fair trade laws would prevent a lockout of this nature. With this in mind the governor has made it quite clear that he intends to seek more regulation for the industry , but without causing the industry and the state irreparable damage. It is simply a matter of method in terms of regulating Kentucky payday loans to a proper point. With more regulation and more monitoring, unscrupulous companies that attempt to slide in under the radar in charge outrages rates for short-term loans, will simply not be able to do so. With the database firmly in place that monitors the activities of each lender, the state will have more of a real-time review, and be able to act quickly to solve disputes and issue necessary penalties. Think of it as a highway police officer, on the side of the road, with his radar gun always on; if you dare to speak past this officer, of course you're going to get clocked and quickly be served an appropriate ticket.

So what this all means for the consumers in the state, who may be planning on obtaining Kentucky payday loans at some point or another, is that there will be appropriate protection in place - in the form of state watchdogs who will not allow the consumer to be taken advantage of. This might be one case where it is very helpful in gratifying to know that Big Brother is indeed watching. With the eyes of the Governor, the Senate and the House, all focused on providing the consumer with the best possible protection that they can muster, we should soon see a growing group of quality services developing our state. It is anticipated that in the very near future, this industry will be a booming part of the economy and the state of Kentucky, as more and more licensed and regulated companies become part of the rapidly evolving industry.