Congress Expected to Vote on CFPB’s Federal Rule on Payday Lending

Sep 18, 2017

A payday loan, which is also known as a “payday advance,” “salary loan,” “payroll loan,” “small dollar loan,” “short-term loan,” “cash advance loan,” or “check advance loans,” is a small, short-term unsecured loan. It’s a type of short-term borrowing where you borrow a small amount at a very high rate of interest. About 12 million Americans use payday loans each year. The typical interest rate of a payday loan is 391 percent APR (annual percentage rate).

To get a payday loan, you should write a post-dated personal check in the amount you wish to borrow plus a fee in exchange for cash. The lender will keep the check and cash it on the agreed upon date, which is usually the borrower’s next payday.

Merchants, who need a low-cost and secure payday loan merchant account, should consider turning to a reputable payment processor and business funding provider like EMB is voted the nation’s #1 high risk processor and boasts an A+ rating with the BBB. Moreover, EMB has an A rating with Card Payment Options and is named one of Inc. 500’s Fastest Growing Companies of 2016.

The Consumer Financial Protection Bureau (CFPB) can’t keep the regulation of interest rates under its direct control, but proposed preventing borrowers from falling into “debt traps.” The CFPB required lenders offering small, short-term loans to document borrowers’ ability to repay the loans or else limit them from taking out successive loans. Alternatively, lenders could offer longer-term loans that met certain specifications.

The idea of regulating payday lenders is strongly supported by the public. According to payday lenders, such regulation would destroy their industry. Republicans suggested that it could be reversed through the Congressional Review Act, which they had used to cancel over a dozen of the rules issued late in former President Barack Obama’s term.

Congress has just voted to give special protections to payday lenders. According to Diane Standaert, executive vice president at the Center for Responsible Lending, this vote came despite the fact that 73% of likely voters are for protection against the harm of the payday debt trap.


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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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