Payday Lending Update

By MB -
(via stoppaydayloanspa.com)
Last week, the House approved 300% interest rate debt to come flooding into the state. The House passed a bill to legalize predatory payday loans by a slim margin. (See how your representative voted here.) Now, the decision now rests in the hands of your Senator. Call today to share your feelings on payday loans.

Payday loans are small-dollar, extremely high-interest loans, which typically carry triple-digit interest rates of 300% annually or higher. They are called payday loans because they generally must be paid back in full, with all interest and fees, on the borrower’s next payday.

While payday lenders market these loans as “short-term” or “emergency” loans, they really are just a debt trap. Because the loans are so expensive, secured by access to the borrower’s checking account, and due in full just two short weeks later, most people who take out a payday loan are unable to pay it back and still have enough money to pay for their regular expenses. Borrowers then have to either renew the loan or take out another payday loan shortly thereafter just to make ends meet. This begins the debt trap cycle.

According to a comprehensive report on payday lending conducted by the Department of Defense, "The debt trap is the rule not the exception: the average borrower pays back $864 for a $339 loan.” Payday loans were so harmful to the finances and military readiness of our service members that Congress established a 36% APR rate cap for military families

Fortunately for Pennsylvania residents, payday lending at triple-digit interest rates has long been illegal under Pennsylvania law. Our state strictly regulates small-loan lenders: unlicensed lenders may charge only 6% interest annually and lenders licensed by the Banking Department may charge higher rates of about 24% annually.

Call today to share your feelings on payday loans.

Comments

Post a Comment

Popular posts from this blog

PathWays PA E-Newsletter: August 6, 2012

By -
Image
Federal Policy Updates  CONGRESS IN AGREEMENT TO WORK ON A 6-MONTH CONTINUING RESOLUTION Last week House and Senate leaders announced that a deal has been reached to pass a 6-month continuing resolution to fund the federal government through next spring. Details of the agreement have not yet been made public, but the continuing resolution will reportedly fund federal agencies at current spending levels. With both chambers of Congress on summer recess, a vote on the agreement will likely be held in September, before the end of the fiscal year. If this agreement is enacted it will ensure that the government will not be shutdown at the end of September when the current spending plan ends. HELP MOVE THE VIOLENCE AGAINST WOMEN ACT FORWARD The Violence Against Women Act (VAWA) needs to be reauthorized to ensure the continuation of vital, life-saving programs and laws. It was the first piece of American legislation that recognized the pervasive nature of domestic violence,
Read more

Mini-Budget Update-Supporting the American Community Survey

By MB -
Image
(via The Census Project ) Next Tuesday, June 19 is an important date to mark on your calendar. The Congressional Joint Economic Committee is holding a public hearing on the economic impact of eliminating the American Community Survey (ACS) at 2:30 p.m., in Room 210 of the Canon House Office Building. Witnesses that will be speaking in opposition to the move to eliminate the ACS are Vincent Barabba, former director of the Census Bureau in two GOP administrations and Ken Simonson, chief economist for the Association of General Contractors and also representing the National Association of Business Economists. It is very important that we pack the congressional hearing room! If you cannot come, please urge your colleages to come. If you represent a non-DC organization contact your friends in Washington and urge them to attend. Also on Tuesday of next week some of our congressional supporters will be holding a noon press conference in the so-called House Triangle right outside the Cap
Read more

Overlooked and Undercounted: Struggling to Make Ends Meet in Pennsylvania

By -
Image
Census data tells us that 13% of Pennsylvania households live in poverty. In reality, even more households don’t have the income they need to reach self-sufficiency. One in four Pennsylvania households – over 846,000 – lack enough income to cover just the necessities. Since 1997, PathWays PA has worked with Dr. Diana Pearce and the University of Washington to calculate  The Self-Sufficiency Standard for Pennsylvania . Over the last 23 years,  The Self-Sufficiency Standard of Pennsylvania  has documented the continuing increase in the real cost of living, illuminating the economic crunch experienced by so many families today. Since 2010, PathWays PA and the University of Washington have also issued three versions of the  Overlooked and Undercounted  report, which looks at the number of households living above and below self-sufficiency. You can now use the interactive materials below to find out what it takes to be self-sufficient in your county. Click here  to read the 2020 O
Read more