Ross Reddick, a Presbyterian minister from Sylacauga, Ala., holds an indicator throughout a rally concerning predatory lending legislation Feb. 4, 2014, in Montgomery, Ala. (Picture: Julie Bennett, AP)
The demise this week of a Louisiana bill that will have reined in payday financing shows how difficult it’s for states to manage the fast loan industry, which customer groups criticize being a trap for the working bad.
Supporters state payday loan providers, which emerged within the 1990s, provide a very important solution to low income borrowers once they require smaller amounts of income to tide them over in one paycheck to another location. But experts state payday loan providers lock hopeless individuals into perform loan rounds with yearly interest levels that will approach 600 per cent. A projected 12 million borrowers use payday loans every year.
State laws and regulations regulating lending that is payday greatly. Arizona, Arkansas, Georgia, new york as well as the District of Columbia prohibit payday financing. Eight states—Connecticut, Maryland, Massachusetts, nj-new jersey, ny, Pennsylvania, Vermont and western Virginia—either don’t have certain lending that is payday provisions or need payday loan providers to comply with their basic loan interest caps, in accordance with the National Conference of State Legislatures. Continue reading →