Posts Tagged ‘Payday Loans’

HB329 is just as bad

Posted: September 11, 2013 in Uncategorized
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This year will be remembered as “bad bill” year. Out of the looney bin of our Missouri Legislature comes HB 329, vetoed by the Governor but now re-approached with an attempt to sustain it by the MO House.

It is a funky bill with a smattering of financial components, one of which is submerged deep in the bill: a provision that protects predatory payday loan companies. This morally offensive payday loan industry runs rampant, unchecked, and preys upon the most vulnerable. Of course, it is favored and protected by certain special interests.

The Governor’s veto of HB 329 must not be overturned.

 

 

 

Just yesterday I was working with a person who was struggling with finances. A whole series of events led to a desperate decision: go down to the corner payday loan shop on the corner. They were cordial and helped her obtain her loan in quick order. The problem was what came next. She was shocked by the interest and payments. It would be impossible to get out of this obligation. In fact, it worsened her original situation.

Payday lenders target the working class and poor folk, the most vulnerable communities, and trap them with impossible debt. In Missouri, these predators charge an average annual percentage rate (APR) of 445%. It’s one of the highest averages in the nation, 26 times the rate cap in Arkansas, where lenders can’t charge more than 17%.

Trapped families pay fees upon fees for what was presented as quick fix money. It sends them toward certain financial oblivion. There are now more payday lenders in Missouri than McDonalds and Starbucks combined.

And where do these profits go? Usually to large out-of-state corporations. Our Missouri families are charged triple digit interest rates and millions of dollars are drained from our communities.

What should we do? Like other states, we should act to cap the rate. The FDIC recommends a reasonable 36%. It’s long overdue.

We can’t avoid economic crisis for every family in Missouri. But we can prevent the vultures from circling over the wounded body laying by the side of the road. That we can and should do.