House Commerce Committee Approves Brand New Tools to deal with Predatory Payday Lending

House Commerce Committee Approves Brand New Tools to deal with Predatory Payday Lending

St. Paul, MN- Today, the home Commerce Committee authorized bipartisan legislation to handle a harmful period of financial obligation caused by predatory payday financing. Rep. Jim Davnie (DFL-Minneapolis) introduced HF 1501 , which will cap the attention rate and fee that is annual pay day loans at 36%. Minnesota Attorney General Ellison testified to get the legislation.

“HF 1501 is a wise practice solution to predatory lending within our state,” said Rep. Davnie. “Hardworking Minnesotans deserve and need usage of safe and accountable resources, perhaps maybe maybe not something made to simply simply take them in and milk their bank reports on the long haul, making them worse off and without funds to pay for fundamental cost of living. It’s high time Minnesota joins those states that place reasonable restrictions regarding the prices of loans for struggling customers.”

A former payday borrower, advocates, and experts described the financial destruction caused by loans carrying 200% to 300% annual interest rates with unaffordable terms that create a cycle of debt at a public hearing. Sixteen states as well as the District of Columbia cap yearly interest on pay day loans at 36% or reduced to disrupt this period of debt. Congress passed an identical 36% limit on loans to active-duty military at the urging of this Department of Defense, following the DoD reported monetary damage from payday advances so significant so it impacted readiness that is military.

Melissa Juliette told lawmakers of a individual experience with pay day loans.

“Two . 5 years back, i came across myself a mother that is single. I dropped behind on every one of my bills, including lease. and so the fees that are late to install. We took down a quick payday loan” stated Ms. Juliette.

“I took down $480 and had been anticipated to pay off around $552. $72 in interest and costs.Continue reading