The Consumer Financial Protection Bureau (CFPB) should listen to Philip A. Locke. He’s a voice from within the industry who understands how to fix the system.” — Gary Rivlin, Pulitzer Prize-Winning Author
If you’re struggling with payday loan debt, taking immediate action to stop automatic withdrawals from your bank or credit union account is crucial. This step can provide immediate relief and prevent further financial strain.
Step 1: Revoke Authorization for Automatic Withdrawals
You have the right to stop a payday lender from electronically debiting your account, even if you previously authorized it. This process is known as revoking the payment authorization, sometimes called an “ACH authorization.”
How to Revoke Authorization:
- Contact the Payday Lender:
• Call and Write: Inform the payday lender that you are revoking their authorization to take automatic payments from your account.
• Sample Letter: Use this sample letter to assist you in drafting your communication. - Notify Your Bank or Credit Union:
• Call and Write: Inform your bank or credit union that you have revoked authorization for the payday lender to take automatic payments from your account.
• Sample Letter: Use this sample letter to assist you in drafting your communication. - Stop Payment:
• Even if you haven’t revoked authorization with the payday lender, you can request a stop payment on the automatic withdrawal.
• Contact your bank or credit union to inquire about their stop payment procedures.
Important Considerations:
- Documentation: Keep records of all communications and confirmations related to revoking authorization and stopping payments.
- Bank Policies: Be aware that some banks or credit unions may charge fees for stop payments.
- State Laws: State laws vary regarding payday loans and automatic withdrawals.
Step 2: Educate Yourself on Payday Loans
Understanding the payday loan industry can empower you to make informed decisions and avoid future debt cycles. The Pew Charitable Trusts provides comprehensive insights into payday loans, including borrower usage and the impact of the Consumer Financial Protection Bureau’s (CFPB) regulations.
Key Facts:
- Prevalence: Twelve million Americans take out payday loans each year, spending $9 billion on loan fees.
- Debt Cycle: The average payday loan borrower is in debt for five months of the year, spending an average of $520 in fees to repeatedly borrow $375.
- Borrower Demographics: The average borrower earns about $30,000 per year, and 58% have trouble meeting their monthly expenses.
Further Reading:
- How can I stop a payday lender from electronically taking money out of my bank or credit union account?
- Payday Loan Facts and the CFPB’s Impact
Step 3: Seek Professional Assistance
After stopping automatic withdrawals, it’s essential to address your payday loan debt comprehensively. As a former industry insider, I offer unique insights and strategies to help you break free from the payday loan cycle permanently.
Contact Information:
Call or text Phil Locke today at 310-614-8439 to begin your path to financial freedom and eliminate high-interest payday loan debt.
Conclusion:
Taking control of your financial future starts with informed decisions and proactive steps. By revoking automatic withdrawals, educating yourself on payday loans, and seeking professional assistance, you can break free from the payday loan cycle and achieve lasting financial stability.