Banking
Opening an account is beneficial in several ways. It provides a secure place to deposit your money. With features like FDIC insurance, it ensures the safety of your deposits. Accessing funds is convenient through various channels such as ATMs, online banking, and mobile apps. A bank account may provide access to other banking services, such as loans, and offers a secure, convenient, and efficient way to manage finances.
Credit unions
Opening a new a checking or savings account with a credit union can be one of the most important steps you can take towards reaching your financial goals. Why? Because putting your money in a credit union account can offer you financial safety, easy access to your funds, avoid fees from check-cashing services and protect you from fraud. Here are some of the top reasons why you should open an account with your local credit union.
Payday Loans & Debt Collectors
Changes to payday loans include:
- New state laws make significant changes for lenders offering consumer small loans and consumer short-term loans, known as “payday loans.”
- Maximum cap for loan finance charges and fees of 50% APR (annual percentage rate – which is now an “all-in” APR that include all interest and fees.)
- Requirement to analyze the borrower’s ability to repay loans offered from 37% to 50% APR.
- Loan threshold for short-term loans increased from $1,000 to $1,300.
- Requirement for all lenders to issue these types of loans under the new laws
Debt Collection
- All debt collectors and debt collection agencies in Minnesota must provide a written document listing Minnesota-based nonprofit organizations that provide credit counseling services to debtors. These credit counseling services are licensed by Commerce to help Minnesotans understand their rights and responsibilities, help them manage their debt, and work with debtors and creditors to satisfy debts.
There are resources available to help you manage your debt: Credit counseling services to debtors resource list
Advice for Consumers
- Consider alternatives to avoid payday or short-term loans. If you are having trouble paying bills, contact the business billing you and request an extension or negotiate repayment. Investigate options such as credit cards or loans from a local bank or credit union, which may have lower interest rates.
- Check the license status of a business operating in Minnesota. Before using an online lender, verify they have a license in Minnesota. Lenders not licensed by the Minnesota Department of Commerce do not follow the same guidelines. You can check for appropriate licenses and report unlicensed lenders on Commerce’s website.
- Get credit counseling. Commerce’s website list has nonprofit credit counseling services available for little to no cost to you.